Church in foreclosure? Make a plan

foreclosureAssociated Baptist Press News/Jeff Brumley — A Missionary Baptist pastor in Anniston, AL, learned recently that his church faces foreclosure and its building may be auctioned to the highest bidder by the end of the month.

The Anniston Star reported Friday that Pastor La’Noan Ealy was shocked by the news, believing the congregation’s efforts to catch up on its mortgage had kept it in good standing with the bank. ABPnews was unable to reach Ealy for further comment.

But Ealy and his flock must not allow shock to delay efforts to get right with lenders or, if necessary, to make plans to find new space in which to worship, according to CBF and Southern Baptist pastors whose churches have weathered dire financial situations.

And whether Mars Hill Missionary Baptist Church decides to fight foreclosure or move on, it must remember that’s it not about the property.

Meet and plan

“They have to come together and remember that even if they lose the building, they are still a church,” said Greg Shoemaker, the bivocational pastor of Orange Grove Baptist Church near Pascagoula, MS.

While Shoemaker’s SBC church did not face foreclosure, it did face extinction as membership dropped to around a dozen in a building made for 120 worshipers. Their solution was to give the building to a younger and growing Hispanic congregation in a deal allowing the original members to worship there indefinitely.

They had tried several other options first, including renting space to a homeless shelter on weekdays. That idea fell through after Hurricane Isaac damaged the property in August 2012.

“Thank goodness I had some business experience,” Shoemaker said. “Had I not had that, I would have been lost as a goose.”

It was that experience that taught him to waste no time confronting the cold, hard financial and demographic facts of the church he had agreed to lead on a part-time basis.

“I immediately jumped to ‘what’s the plan?’” he said. “I’ve got to show this congregation that we cannot just waddle along, because it’s not going to end well.”

That was Greg Smith’s conclusion, too, at Scott Boulevard Baptist Church in Decatur, GA.

It was in 2007 that he began looking at the church’s mission, its demographics, its financial situation and its location. No matter how he sliced it over the next few years, the math didn’t add up to long-term survival.

“That moment of recognition came two years ago for us,” Smith said.

Examine options

And what he did next is what he would urge the Ealy and other pastors facing major moments of decision: get your leaders together.

“We sat down and had a very difficult heart-to-heart meeting,” Smith said. “I said, ‘Let’s talk about what we do and what are our options and what direction do we go from here.’”

For the CBF congregation, that turned out to be agreeing to sell the property to a commercial developer and using the proceeds to establish an endowment to continue ministering to the elderly and homebound in the area. They will worship as a congregation in the chapel at nearby First Baptist Church of Decatur, probably beginning in November or December this year.

In addition to that initial meeting and facing the facts head-on, Smith said he consulted with another pastor who had experienced the same situation and also attended a discernment retreat.

Be careful in borrowing’

There was likely a lot of that going on during the height of the nation’s recent recession, said the CoStar Group, a real-estate information company. Cited in a 2012 Reuters news story, the group said 138 churches had been sold by banks in 2011, compared to 24 in 2008.

But some lenders nowadays are saying church foreclosures are a small percentage of their business, said Phill Martin, deputy chief executive officer of the National Association of Church Business Administration.

Many lenders would prefer to work things out with churches rather than shut them down, Martin said. But that’s no guarantee congregations won’t find their beloved sanctuaries on the auction block if they get behind on their payments, he added.

“Churches have to be very careful when they start building and borrowing,” he said. “Many times, well-intentioned spiritual leaders have a sense of vision that is broader than their congregation’s ability to support.”

When a church finds itself in Mars Hill’s position, he said, is when they need to quickly and honestly communicate with lenders.

Then pull lay leaders together to examine ways to generate additional revenue — such as inviting another congregation to share space, or selling off some of the property, Martin said.

Other sources of financial assistance may also be available. Denominational churches may be eligible for help from associations. There are also lenders who specialize in working with ministries.

The best option is to avoid getting into this spot in the first place, Martin said. “That’s why, when you first start slipping in your payments, that’s the time to start talking to your lender.”

Jeff Brumley is assistant editor of Associated Baptist Press.


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