The Real Deal Miami

Foreclosed religious properties a tough sell for lenders

November 09, 2009 12:59PM

As South Florida’s religious centers struggle to stay afloat, their lenders have been left in the difficult position of foreclosing on properties both meaningful to their communities and tough to sell. Historically, houses of worship have presented lenders with little credit risk, but the economic downturn has made it increasingly difficult for churches to bring in donations. Thirteen parishes were shuttered last month by the Catholic Archdiocese of Miami, and most of them are now for sale. In October, Stonegate Bank foreclosed on the Boynton Beach’s Chabad Lubavitch, after the synagogue defaulted on a $3.8 million loan, and the Tabernacle of Pentecost Church in Royal Palm Beach, which has a $4.8 million loan, is also facing foreclosure. These properties can be difficult to market. Located in residential neighborhoods, they often can’t be sold as commercial properties, and their architectural features tend to have limited appeal. Last year, Church Mortgage and Loan, based in Maitland, filed for bankruptcy after failing to sell 12 foreclosed churches. [Miami Herald]