0

God in mortgage default

Some churches are caught in the mortgage meltdown, and part of the problem: McMansionization


 

“There is definitely a trend,” said Dan Mikes, a banker who has specialized in church loans for 18 years at Bank of the West in Walnut Creek, Calif. “Historically, there were no [church] foreclosures.” Bankers considered churches a pretty safe bet, said Mikes. Passing the plate provides a steady source of income, church budgets are flexible and religious folks pay banks back. That all changed in the late 1990s, bankers say, around the same time subprime mortgages and McMansions became hot. Churches competed to keep up with Pastor Jones across the street. They have a café, we want a café. They have a 1,000-seat auditorium, we want a 2,000-seat auditorium. New banks heard churches were a safe market to dabble in. They over-estimated churches’ growth projections and threw money at them, said Mikes.

Religion News Service


 
Filed under:

Sign in to comment.