Church foreclosures (2)

December 30, 2008

I did a little more digging and found a few more church-foreclosure-related stories:

I am still tempted to believe that smaller churches with a substantial debt-to-member ratio are the ones who are defaulting on loans.

Now let’s take another look at the numbers from the New York Times and the Wall Street Journal:

  • The Times estimates that a quarter of churches have mortgages, on the basis of a survey of 115 counties. If we combine that with the estimate from the Wall Street Journal (335,000 churches) that would be 83,750 churches with mortgages. That’s a lot of mortgages.
  • But is that survey reasonable? Only if a survey of 115 counties is representative for a nation with 3141 counties and county equivalents, plus more than a hundred administrative districts.
  • The Times estimates a default rate of 0.31% on the basis of their study (254 properties/82,441 churches). That’s roughly a quarter of the churches in the Journal estimate. That would suggest something in the vicinity of a thousand churches over the course of the (unstated) survey period.

That still looks like a tiny default rate to me; it’s about one-tenth the default rate for prime mortgages from April 2007 to April 2008.

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One Response to “Church foreclosures (2)”

  1. […] OD Today: 30 December 2008 Church foreclosures (2) […]

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