More churches foreclosing, filing for bankruptcy
We've heard that nonprofits, including performing arts organizations such as the Baltimore Opera Company, have filed for bankruptcy during these tough economic times.
Now, even churches are filing for Chapter Eleven, according to the Wall Street Journal. And although once considered a safe investment, banks and lenders have been foreclosing on church buildings, the story states.
Construction of religious buildings boomed in the last decade or so, and churches borrowed a lot to fund the growth:
"Churches were long considered good credit risks, lenders say. Weekly collections tend to be steady, even during recessions, and churches feel a moral tug to pay debts. Most of the nation's 335,000 churches carry little or no mortgage debt, and are based in buildings that were paid off long ago.
But some churches, especially those not affiliated with major denominations, borrowed briskly to build or expand in recent years. Spending on construction of houses of worship rose to $6.2 billion in 2007 from $3.8 billion in 1997, according to the U.S. Census. Now, churches are seeing congregants lose jobs and savings."
