The gates of hell will not prevail against the work of the church, but what about that massive bank loan?

An April CBN News report on church foreclosures was rebroadcast online last week and got Urban Faith digging into the topic. The report focused on two black churches in Atlanta that were threatened with foreclosure. One church, Higher Ground Empowerment Center (HGEC), renovated (and changed its name) after a 2008 tornado damaged its building, but couldn’t repay its $1 million mortgage when attendance and giving declined during a year-long displacement.

When the story originally ran, the church’s fate was uncertain. Urban Faith tried to contact HGEC both by phone and email to find out what the outcome was, but didn’t get a response. Citi-Data.com lists the church (under its former name) as the owner.

The church’s Facebook page is active and advertises a Financial Fast on the first week of every month in 2011. Congregants are advised to meditate on Scripture verses (Exodus 22:14; Proverbs 22:7; Matthew 25:14-20; Malachi 3:10) and refrain from discretionary spending and credit card dependency. The fast was scheduled to kick off in May with a 4-week Bible Study on Becoming Better Financial Stewards.

“The fast is really about curbing the need to consume. It doesn’t matter whether you’re a good steward or a spendthrift; all of us consume more than we need,” the announcement said.

If any of our Atlanta readers know the fate of this congregation, please let us know. Whatever it is, we applaud its willingness to advocate better financial stewardship.

“More than 90 metro Atlanta churches were posted for prospective foreclosure from 2006 to 2010, according to a review by the Kennesaw-based real estate research firm Equity Depot for The Atlanta Journal-Constitution,”  AJC reported in February. Fifty churches, most of them small African-American congregations, “dominate the foreclosure lists,” AJC reported.

In January, The Wall Street Journal published a story that explored the roots of  the church foreclosure crisis nationwide. The bottom line: Historically, churches have been accustomed to obtaining specialized loans that allow them favorable repayment structures. But after the economic downturn, many of those churches were faced with situations similar to the subprime mortgage crisis that devastated countless homeowners.

“Since 2008, nearly 200 religious facilities have been foreclosed on by banks, up from eight during the previous two years and virtually none in the decade before,” The CoStar Group real estate services firm told the Wall Street Journal. A representative at CoStar told Urban Faith Friday that the group hasn’t updated its church foreclosure data since then, but promised to keep us posted if it does.

In April 2010, Reuters published an in-depth report on the situation, which also noted that African American churches have been hit particularly hard.

“Their congregations have suffered higher unemployment, and often the churches provide more services,” Reuters reported.

Rev. Grainger Browning, senior pastor of Ebenezer AME Church in Fort Washington Maryland told the news wire, “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.”

A historically high rate of church building preceded the most recent economic collapse. According to data from the U.S. Census Bureau, money spent on the construction of religious buildings rose sharply in the late 1990s and peaked at $9 billion in 2003 before leveling off. A study by the Barna Group found that more than half of U.S. churches said they have been hurt by the recession, according to the Reuters report.

Then, on July 8, BusinessWeek published a grim article about the residential housing collapse titled “The Housing Horror Show Is Worse than You Think,” which makes us suspect the crisis is far from over for churches.

“The housing decline will be a long, multiyear process, and the multiplier effect across the economy will be enormous,” Doug Ramsey, an analyst at Minneapolis investment firm Leuthold Group told BW.

“What was real and what was never meant to be?” Ramsey wondered.

It’s a good question for struggling congregations as well. With iconic churches like Robert Schuller’s Crystal Cathedral going bankrupt, perhaps its not only the end of the McMansion era, but also the church expansion one.

The situation leaves us with questions:

What was done in faith and what was bad stewardship?

What do church foreclosures and bankruptcies do to the church’s collective witness?

How do we respond in faith to this crisis?

If your church is being foreclosed upon or facing serious financial hardship and you think your story can help others, we want to hear from you. Email me at [email protected]

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