Church foreclosures reach record highs

Church foreclosures have reached record numbers as the ripples of the 2008 financial crisis reach religious institutions, said Reuters.

New data from the real estate information company CoStar Group, said since 2010, 270 churches had been shuttered after defaulting on their loans, with 138 of those occurring in 2011 – an annual record.

Reuters reported that up to 90 per cent of these foreclosures were lender-triggered.

According to Slate, churches, like homeowners, took advantage of historically low lending rates to take out loans for improvements and expansions to house growing congregations, despite their inability to repay the loan.

Churches are only foreclosing now as banks have been reluctant to pressure religious institutions.

Churches took out 5-year commercial loans rather than the typical 30-year loans most homeowners take out, creating a far smaller window to pay back the loans.

Foreclosures have affected small to medium sized churches most severly and, according to Reuters, all denominations have been affected by the financial crunch.

Many churches took loans out from the Evangelical Christian Credit Union, which offered institutions cheap loans that it turned out they could not repay, said the Daily Mail.