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http://www.msnbc.msn.com/id/46681498/ns/business-real_estate/#.T1o7VaN5mSN

Looks like an intersting contrast to the other post I made about banks willing to let homeowners stay in foreclosed properties.

Here's the article again on homeowners staying on in foreclosed properties:

http://www.msnbc.msn.com/id/46620674/ns/business-us_business/

I read the article and learnt something about finance, which was nice.

It seems the issue is that churches usually finance their mortgages on a type of loan which repays the capital as a lump sum at the end of the term.

These loans are often arranged on terms of five years, and may be rolled forwards into a new loan as they come due.

Many churches' incomes have collapsed since the start of the global financial crisis. As the loans come due, they are unable to repay them.

The banks however are unable to roll the loans forwards, because of the new regulations concerning adequate coverage for bad loans on your balance sheet.

Who knows if it is worse for families to be made homeless or their churches?

I'm gonna go with it's worse for you to be homeless as opposed to having your church foreclosed.
(not sure I read that last sentence correctly, but I'm going with it).

I wonder if the US has restrictive covenants on land use?

According to the article revaluing of land rather than church finances is the critical factor driving the trend.

Religious buildings are not normally businesses, Revaluing the land values on a purely commercial basis doesn't help if the land does not have commercial use.

Exception can and should be made for land used commercially by the religious group concerned, not for places of worship.

Don't worry, god will provide.


Or not.

I was irritated to read in the article that banks have been hesitant to foreclose on these properties because they house churches. I know religion is heavily integrated into American culture but when a certain type of favoritism is bestowed upon a loan due to the loan client's connection to a church facility I think that is just grossly inappropriate. If churches want to behave like people and businesses and engage in borrowing from banks they should be treated like everyone else. Perhaps I am ignorant of banks standard operating procedure for loans but from my vantage point what one does on the indebted property should have no bearing on how the lender treats the loan.

the cookie has been crumbling for too long, let the damn thing die already


when your financial model demands your followers give up their money, then it only seems to reason that a recession would in fact, destroy their only source of income. The Catholic church is so old school, if you aren't willing to evolve with the times, then you die with them.

Kilkrazy wrote:I read the article and learnt something about finance, which was nice.

It seems the issue is that churches usually finance their mortgages on a type of loan which repays the capital as a lump sum at the end of the term.

These loans are often arranged on terms of five years, and may be rolled forwards into a new loan as they come due.

Many churches' incomes have collapsed since the start of the global financial crisis. As the loans come due, they are unable to repay them.

The banks however are unable to roll the loans forwards, because of the new regulations concerning adequate coverage for bad loans on your balance sheet.

Who knows if it is worse for families to be made homeless or their churches?

I,d say churches, then there is less places that help homeless.

DIDM wrote:the cookie has been crumbling for too long, let the damn thing die already

when your financial model demands your followers give up their money, then it only seems to reason that a recession would in fact, destroy their only source of income. The Catholic church is so old school, if you aren't willing to evolve with the times, then you die with them.

I'm pretty sure the Catholic Church has been around longer than any current national government.

Also, isn't "your financial model demands your followers give up their money" the basic concept of taxation?*

edit: * the key difference being "we'll put you in prison if you don't give us your money" vs. "you'll go to hell if you don't give us your money."

biccat wrote:

DIDM wrote:the cookie has been crumbling for too long, let the damn thing die already

when your financial model demands your followers give up their money, then it only seems to reason that a recession would in fact, destroy their only source of income. The Catholic church is so old school, if you aren't willing to evolve with the times, then you die with them.

I'm pretty sure the Catholic Church has been around longer than any current national government.

Also, isn't "your financial model demands your followers give up their money" the basic concept of taxation?*

edit: * the key difference being "we'll put you in prison if you don't give us your money" vs. "you'll go to hell if you don't give us your money."

For once Biccat MAde me laugh.

Orlanth wrote:
Religious buildings are not normally businesses, Revaluing the land values on a purely commercial basis doesn't help if the land does not have commercial use.

Outside zoning restrictions (and even then most of the time) all land has commercial use. My dentist runs his practice out of an old quasi-Victorian in the suburbs.

In any case, this phenomenon isn't new, its just more common now for the same reason foreclosures are more common in the residential sector.

As for the distinction between home owners and churches, there is less political will to save churches, and I imagine they are, statistically, less reliable regarding repayment.

Cannerus_The_Unbearable wrote:Don't worry, god will provide.


Or not.

With charismatic denominations this is less ridiculous than it sounds.

biccat wrote:

DIDM wrote:the cookie has been crumbling for too long, let the damn thing die already

when your financial model demands your followers give up their money, then it only seems to reason that a recession would in fact, destroy their only source of income. The Catholic church is so old school, if you aren't willing to evolve with the times, then you die with them.

I'm pretty sure the Catholic Church has been around longer than any current national government.

Also, isn't "your financial model demands your followers give up their money" the basic concept of taxation?*

edit: * the key difference being "we'll put you in prison if you don't give us your money" vs. "you'll go to hell if you don't give us your money."

taxes pay for beneficial things, like school and roads

giving your money to the CHURCH pays victims of sexual abuse and greedy popes

Cannerus_The_Unbearable wrote:Don't worry, god will provide.


Or not.

Well considering that I've heard pastors saying, with loud cheers I should note, that "if God had decreed that someone should die of smallpox, it would be a sin to have them vaccinated.", I think they shouldn't complain when "God" shuts down their church. Why, if their church meant to not be shut down it'd still be up!

Mind you you, not all churches believe in such vapid fatalism. I just had to mention it because I've recently heard that kind of argument about any number of things >.<

Melissia wrote:Well considering that I've heard pastors saying, with loud cheers I should note, that "if God had decreed that someone should die of smallpox, it would be a sin to have them vaccinated.", I think they shouldn't complain when "God" shuts down their church. Why, if their church meant to not be shut down it'd still be up!

Mind you you, not all churches believe in such vapid fatalism. I just had to mention it because I've recently heard that kind of argument about any number of things >.<

Churches are merely unnecessary middle men. I doubt god cares one way or the other.

I think I can make some sort of link between the devil and banks though.

George Spiggott wrote:I think I can make some sort of link between the devil and banks though.

I know I can make some sort of link between the devil and politicians....

Its a sad turn of events but in this economy all too likely.
But it can have an upside with some of these churches returning to their roots and meeting in a member's home.
This presupposes that there are members left that have homes in which to meet.

Jesus was all for taking down the temples, saying the only temple you need is your body

Some comments redacted. -Mannahnin

DIDM wrote:taxes pay for beneficial things, like school and roads

giving your money to the CHURCH pays victims of sexual abuse and greedy popes

There are a lot of churches, and many of them do organize important and real charitable services.

Taxes also go to some objectionable things; I don't expect you like them paying to imprison non-violent drug offenders.

Mannahnin wrote:

DIDM wrote:taxes pay for beneficial things, like school and roads

giving your money to the CHURCH pays victims of sexual abuse and greedy popes

There are a lot of churches, and many of them do organize important and real charitable services.

Taxes also go to some objectionable things; I don't expect you like them paying to imprison non-violent drug offenders.

Then they probably ought to spend less time organizing charitable services and more time paying their mortgages. You don't see me getting a break on mine for occasionally working at a food pantry, do you?

This is why restrictive covenant is useful.

Restricitive covenenants earmark certain lands for community use. Relgious buildings are just one example of this charity workshops are another.

When a restrictive coveneant is in place then unless the covenant is lifted by a court then the land is non commercial. The local authority cannot then say; 'this land is worth x to a business thus the church must pay x like a business does'. Instead the rent is capped at a fraction of the amount on the understanding that the leaseholder is not out there to make money per se.

Consequenbtly charity groups can focus their monies were it matters on the beneficiaries of their work and not landlords.

You might fairly ask, why not move the church to cheaper land, the answer is that churches and other charity building need accessibility, and thus often are on prime land in communities or town centres.

A volunteer staffed drop in medical centre or a town centre church needs to be in the town centre and thus needs protection from town centre market rates for businesses, which a fast food outlet can pay but a charity or religious building cannot.

If churches and other non profit groups have to spend less time organisting support and more time on their mortgages the whole community suffers. Indeed it may not even be possible for a non-profit organisation to actually cover commercial rents at all.

For example a youth homeless drop in centre needs to be town centre based, as that is where youth homeless are. Youth homeless work is important but gains no income from its working and generally lacks prestige. How are such organisations protected? A restrictive covenant does a lot, it prevents landlords, mortgage lenders and local authorities from gouging the charity with commercial fees and rents, yet the covenant also strictly prohibits certain activity types from the land use. So if the project moves a shop cannot just move in take over and claim the same benefits, only another community project can such as a temple or library.

Orlanth wrote:This is why restrictive covenant is useful.

How would restrictive covenants work in this scenario? The church is being foreclosed on by a bank for not paying their mortgage, not by the city for not paying taxes (IIRC churches don't pay property taxes).

biccat wrote:

Orlanth wrote:This is why restrictive covenant is useful.

How would restrictive covenants work in this scenario? The church is being foreclosed on by a bank for not paying their mortgage, not by the city for not paying taxes (IIRC churches don't pay property taxes).

Biccat remembers correctly.

This one surprised me about the Crystal Cathedral:

http://www.nytimes.com/2012/03/11/us/robert-schuller-crystal-cathedral-founder-quits-board.html

biccat wrote:

Orlanth wrote:This is why restrictive covenant is useful.

How would restrictive covenants work in this scenario? The church is being foreclosed on by a bank for not paying their mortgage, not by the city for not paying taxes (IIRC churches don't pay property taxes).

I think what is more likely is that its not just they owe money on the building or land, its that they have loans to pay for improvements. Like 10 years ago my church (which I occasionally go to mass out, maybe 5 times a year) added on a huge kitchen, dining hall, and gym above it. It was also part of the school. Now the school is gone and it sits empty. Money they didn't have was obtained via loans to make improvements so that they could stay competitive and offer education on the same level of technology as public schools. Also the priests living quarters were slowly updated over that time too (it can house 3-4 people, plus the church administrative offices)

Schools in this area at least are down in enrollment all over. With less students coming in, the less money they made. When you have 4-5 catholic private schools very close, they all hurt. The Diocese decides that only 1 of them will house a school and combine the classes, they other churches are stuck with huge buildings with loans on them, and no money coming in to support them.

Surely the Roman Catholic church is able to pay off its mortgages.

biccat wrote:

Orlanth wrote:This is why restrictive covenant is useful.

How would restrictive covenants work in this scenario? The church is being foreclosed on by a bank for not paying their mortgage, not by the city for not paying taxes (IIRC churches don't pay property taxes).

restrictive covenant properties are marketed for less, so mortgages are less.

If a property is valued at x for market rate, a shop needs a mortgage for x which it can account for in its business plan. A similar sized plot next door however with restrictive covenant can only sell for say x/3 because its not a commercial property, so the rent is less and the mortgage is less. However restrictive covenants mean that a shop cannot take over the plot at a bargain basement price, only a religion or charity or community building can.

Its a good scheme and helps charities compete in urban area for good locations which would otherwise have a high ground rent.


Automatically Appended Next Post:

Kilkrazy wrote:Surely the Roman Catholic church is able to pay off its mortgages.

Long established denominations usually own the land outright, paid for a long time ago.

DarkTraveler777 wrote:I was irritated to read in the article that banks have been hesitant to foreclose on these properties because they house churches. I know religion is heavily integrated into American culture but when a certain type of favoritism is bestowed upon a loan due to the loan client's connection to a church facility I think that is just grossly inappropriate. If churches want to behave like people and businesses and engage in borrowing from banks they should be treated like everyone else. Perhaps I am ignorant of banks standard operating procedure for loans but from my vantage point what one does on the indebted property should have no bearing on how the lender treats the loan.

Wanna bet? Foreclose on a church and its very bad PR.


Automatically Appended Next Post:

DIDM wrote:

biccat wrote:

DIDM wrote:the cookie has been crumbling for too long, let the damn thing die already

when your financial model demands your followers give up their money, then it only seems to reason that a recession would in fact, destroy their only source of income. The Catholic church is so old school, if you aren't willing to evolve with the times, then you die with them.

I'm pretty sure the Catholic Church has been around longer than any current national government.

Also, isn't "your financial model demands your followers give up their money" the basic concept of taxation?*

edit: * the key difference being "we'll put you in prison if you don't give us your money" vs. "you'll go to hell if you don't give us your money."

taxes pay for beneficial things, like school and roads

giving your money to the CHURCH pays victims of sexual abuse and greedy popes

Go peddle your personal issues elsewhere. I'm sure the monthly "Christers are EVILLL!!!!" thread is around somewhere. This thread is about business.