Mega-Churches facing forclosure....


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The Vilian
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Houses of God increasingly face foreclosure

FORT WASHINGTON, Md. - By the time thousands of parishioners stream into the 3,000-seat Ebenezer AME Church on Easter Sunday, church leaders hope to have something else to celebrate: financial revival.

The congregation, one of America's largest, has been scrambling to raise funds to save the arena-sized sanctuary from potential foreclosure. To that end, it has enlisted national leaders, such as the Rev. Jesse Jackson and Harvard Law School's Charles Ogletree, who was President Barack Obama's law professor.

Thanks to its 10,000-member congregation and connections with business and civic leaders, Ebenezer expects to avoid the fate of a growing number of U.S. churches, which are defaulting on loans, facing foreclosure and even declaring bankruptcy at an unprecedented pace.

"It's happening to virtually every church," said the Rev. Grainger Browning, senior pastor of Ebenezer. "At a recent meeting with the 100 top pastors in the country, it was amazing how all of us were facing some sort of challenge with the banks."

Supercheap, few-questions-asked loans were a temptation even churches could not resist, but now they are paying for their mistakes as the debt crisis enters the house of God.

Long considered among the safest of borrowers, churches gambled on real estate at a time when credit copiously flowed and lenders were startlingly lax.

Dip in donations

But places of worship have since been battered by the economic downturn. Donations have dipped, investment returns have plunged and bank credit is still hard to come by.

"You build it and they will come. It really was true through the years," said Brad Hampton, executive pastor at the Faith Center of Rockford, Ill. "They like newness," he says of younger churchgoers.

Hampton's megachurch was erecting a new sanctuary that could seat almost 2,000 when his lender refused further credit beyond an initial $4.2 million. The Faith Center, which also has a 48,000-square-foot "life center" that operates various ministries, is being foreclosed upon.

"People call and say 'You're not alone'," Hampton said.

Getting a complete picture of the financial health of churches across the country is difficult. But a review of filings in the Thomson Reuters Westlaw legal database shows foreclosure proceedings against U.S. churches have nearly tripled since December 2007, when the recession began, compared with the previous seven years, which included the dot.com bust and economic downturn.

Court records also reveal more than 100 churches have declared bankruptcy in the last year, often in a last-ditch attempt to halt a sheriff's sale. That number could rise fast.

Fighting foreclosure

An investigation by a Memphis television station found hundreds of churches in the city fighting foreclosure. Jackson estimates thousands of African-American churches nationwide are in danger of foreclosure, with 200 in Atlanta alone.

Ebenezer AME got into trouble when its cash reserves fell below $750,000, tripping a covenant on its loan.

Its lender, Bank of America, initially insisted that the church hire a consultant, at a cost of $5,000 a day, to keep a watch on its finances, and required cuts to pastoral benefits such as a car allowance. The bank eventually dropped those demands, along with a plan to raise the interest rate on the church's $8.5 million mortgage, so long as Ebenezer AME found another lender to take over the loan.

Source
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Typical.....

Black Churches are notorious for fiscally mis-managing their finances. As once a deacon and a member of a small historical Black Church in Virginia, I remember being called to a meeting to vote on a made-up adopted budget. This made-up budget was only used for submittal documentation given to a bank to apply for a $50,000 construction loan. Not fully understanding the terms and conditions during the payment period and an huge interest rate increase after 5 years, the pastor saw it as a gift from God, which lead the congregation into believing that through devine intervention that the loan will get paid off. Since churches are tax exempt, banks are very relax about loaning them money. I guess loaning money to churches, probably help banks to utilitize some tax loop hole by lending to non-profit organizations. Black Churches do not keep up with their spending habits to make adjustments when revenue goes south, which I see this as being the responsiblies and duties of the Church's Finance and Treasury Committee. And once they realize things have gone bad, it's pretty much too late.
 
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Last summer, our church actually started showing us the budget needs and shortfalls BEFORE they took up collection. My pastor said that over the summer, people go on vacation and take the churches money... my church is quite empty over the summer for some reason and we have a 3000-seater. Of course it was at capacity yesterday. My pastor does not take a salary from the church..and has not for about 20 years. We give a weekly love offering to him. But I was surprised at how much we spend weekly!
 
JAG89 said:
Typical.....

Black Churches are notorious for fiscally mis-managing their finances. As once a deacon and a member of a small historical Black Church in Virginia, I remember being called to a meeting to vote on a made-up adopted budget. This made-up budget was only used for submittal documentation given to a bank to apply for a $50,000 construction loan. Not fully understanding the terms and conditions during the payment period and an huge interest rate increase after 5 years, the pastor saw it as a gift from God, which lead the congregation into believing that through devine intervention that the loan will get paid off. Since churches are tax exempt, banks are very relax about loaning them money. I guess loaning money to churches, probably help banks to utilitize some tax loop hole by lending to non-profit organizations. Black Churches do not keep up with their spending habits to make adjustments when revenue goes south, which I see this as being the responsiblies and duties of the Church's Finance and Treasury Committee. And once they realize things have gone bad, it's pretty much too late.
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Man you really don't like Black churches huh?
 
Why do we allow this to happen is the question. Thankfully, my home church in Mississippi has a retired accountant handling the books now.
 
C.O.G. said:
The article is from Maryland. Memphis was mentioned later. Where is Ebenezer?
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Ebenezer is in Maryland, in the DC suburbs. It is one of the major AME churches in the area and gave offspring to many other AME churches in the area.
 
jag4life said:
Man you really don't like Black churches huh?
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It is not the church that I don't like; it is how the members of most of these churches handle business. And I knew this was a Black church from the AME, which stands for African Methodist Episcopal. Black Churches are a direct reflection of the Black community. The same thing happen to this church, which lead to a church fight between the pastor and congregation that has been watch by over 4 million people on YouTube and it is also an AME church.

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Two of my best friends attend Ebenezer AME Church and I have been there a couple of times. From my knowledge of what is happening at the church this article is a bit misleading and slanted.
 
JAG89 said:
It is not the church that I don't like; it is how the members of most of these churches handle business. And I knew this was a Black church from the AME, which stands for African Methodist Episcopal. Black Churches are a direct reflection of the Black community.
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They mentioned 2 churches in the article... the other one wasn't a Black church.
 
jag4life said:
They mentioned 2 churches in the article... the other one wasn't a Black church.
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I didn't read the full article; I only read the posted part. But I still believe that Black churches would enter foreclosure disproportionally more than any other church due to their lack of fiscal accountability, which I have personally witness. But my opinion could be slightly biased, because I've never been a member of a non-Black church.
 



JAG89 said:
I didn't read the full article; I only read the posted part. But I still believe that Black churches would enter foreclosure disproportionally more than any other church due to their lack of fiscal accountability, which I have personally witness. But my opinion could be slightly biased, because I've never been a member of a non-Black church.
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They mentioned both churches in the posted part of the article. LOL
 
jag4life said:
They mentioned both churches in the posted part of the article. LOL
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Here's a direct quote taken from the article:

An investigation by a Memphis television station found hundreds of churches in the city fighting foreclosure. Jackson estimates thousands of African-American churches nationwide are in danger of foreclosure, with 200 in Atlanta alone.
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I guess the Rev. Jessie Jackson doesn't like Black churches either.
 
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Isn't the church that took over the Summit about to close it's doors? Are they going thru the same things? I never heard the reasoning.
 
O'Bladerunner said:
Isn't the church that took over the Summit about to close it's doors? Are they going thru the same things? I never heard the reasoning.
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You're talking about Joel Osteen's church??? This is supposedly the largest church in the nation. That place be packed when he's board casting on TV.
 
O'Bladerunner said:
Isn't the church that took over the Summit about to close it's doors? Are they going thru the same things? I never heard the reasoning.
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I hope not. They got something like a 50-year lease on that building for a $1/yr (exaggeration) or something like that. Financial hardships would only be produced by their renovation to meet their own needs.
 
O'Bladerunner said:
Isn't the church that took over the Summit about to close it's doors? Are they going thru the same things? I never heard the reasoning.
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Noooo that's Lakewood. They just purchased the Summit from the city for $7.5M cash after having paid a 30 year lease up front. Basically got that huge bldg on prime property for about $30M total and with no debt.
 
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