Boom-Time Loans Cripple Churches

Even houses of worship are facing foreclosures and unpaid bills these days, the AP reports. With credit markets dried up, churches and synagogues—normally rock-solid in recessions—are abandoning half-built properties and scrambling to find a home. "We now have children who don't have classrooms to get into, adults who have to go to an overflow room," one bishop said.

The foreclosure and delinquency rate for churches isn't high—"a noticeable increase," one lender called it—but any uptick stands out, because people still worship in recessions and church staffs can easily be trimmed. Some say the lending boom inspired irresponsible church mortgages. "The starting point was the commercial banks," which made "everybody else move fast and loose," one bond broker said. (More foreclosures stories.)