(Reuters) - Banks are foreclosing on America’s churches in record numbers as lenders increasingly lose patience with religious facilities that have defaulted on their mortgages, according to new data.
The surge in church foreclosures represents a new wave of distressed property seizures triggered by the 2008 financial crash, analysts say, with many banks no longer willing to grant struggling religious organizations forbearance.
Since 2010, 270 churches have been sold after defaulting on their loans, with 90 percent of those sales coming after a lender-triggered foreclosure, according to the real estate information company CoStar Group.
In 2011, 138 churches were sold by banks, an annual record, with no sign that these religious foreclosures are abating, according to CoStar. That compares to just 24 sales in 2008 and only a handful in the decade before.
The church foreclosures have hit all denominations across America, black and white, but with small to medium size houses of worship the worst. Most of these institutions have ended up being purchased by other churches.
The highest percentage have occurred in some of the states hardest hit by the home foreclosure crisis: California, Georgia, Florida and Michigan.
“Churches are among the final institutions to get foreclosed upon because banks have not wanted to look like they are being heavy handed with the churches,” said Scott Rolfs, managing director of Religious and Education finance at the investment bank Ziegler.
Will we see more pastors standing with the Occupy movements come spring?
Few economists have been more correct about the economic crisis of the last several years than the proudly liberal Paul Krugman.
Krugman spotted the “liquidity trap” early on (since the problem with the economy was too much debt, cutting rates and creating easier money would not get us out of it).
Krugman shot down the hyperventilation about a coming hyper-inflation, arguing that the global labor glut would prevent easy credit from inflating wages.
Krugman quickly pronounced the Obama Administration’s stimulus as far too small and said it would not get the job done.
Krugman scoffed at the idea that interest rates were about to skyrocket as our creditors decided en masse that we were so fiscally irresponsible that they couldn’t possibly lend us any more money.
He has been right on all counts.
Recently, Krugman has denounced the “austerity” push of the GOP, arguing that tackling our debt and deficit problem right now with spending cuts is the worst move we can make. Such cuts, Krugman argues, will put more people out of work and shrink the economy. And this, in turn, will increase, not decrease, the deficit.
Krugman thinks we should tackle the debt and deficit problem later, when the economy is on more solid footing. He points to record-low interest rates as a sign that the world is still willing to lend us as much money as we want, practically for nothing. And he argues that, instead of cutting back, we should be using that money to build infrastructure, strengthen the economy, and put more Americans back to work.
And some Republicans, it seems, are starting to notice.
A couple of months back, Republican commentator David Frum made a startling observation:
Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?
Will Frum be ostracized for that remark? After all, Paul Krugman is supposed to be Public Enemy No. 1.
Or will more Republicans begin to agree that, although government spending does indeed need to be cut eventually, and the debt problem does need to be addressed, suddenly chopping, say, $1 trillion of government spending next year is not the best way to get ourselves out of this mess?
Fairness and Accuracy In Reporting (FAIR) debunks and fact-checks CNN on Occupy Wall Street.
Up until this announcement, the Occupy Wall Street movement has been unwieldy and somewhat lacking in a coherent voice, but that’s all about the change. New York City labor unions have decided to descend upon the streets of Lower Manhattan on Friday.
The leadership of the Transit Workers Union Local 100—comprised of subway and bus workers—voted unanimously to support the protestors. With a membership of 38,000, 5 Oct. will easily be the largest day yet in the protest. On 12 Oct., SEIU 32BJ, representing doormen, security guards, and maintenance workers around the city, is also staging a rally in support of the cause.
It’s unclear for now whether the transit system will be completely shut down while the 38,000 workers are participating in the protest. If it is, the Occupy Wall Street movement will definitely make its mark in history. And either way, it now has a substantial footing to make a real statement about American economy policy.
Jackie DiSalvo, an #OccupyWallStreet organizer, summarized the movement’s policy as such: “Occupy Wall Street will not negotiate watering down its own message.”
You have no idea how excited I am to see this.
Banks are essential to an economy. Their proper role is to facilitate commerce. Today, banks do facilitate commerce, but they also do a lot of other things that, entirely by design, enrich few at a great cost to many.
This isn’t particularly new. But now regular folks who don’t work in this ridiculous field are learning more about its design, which is no longer limited to facilitating commerce. They might not know what a weather derivative is or be able to explain what happened to their mortgage after they secured it. But they do know that they are no longer the customer. They know banks can make money without them. They don’t much like that. Who would?
That’s why the Occupy Wall Street protest is happening. That’s why it is newsworthy. And that’s why those protesters will have done more to strengthen the economy than any trader who goes to work tomorrow.
Period. Full stop.
Exhibit 1 is “deep poverty”, people living below 50 percent of the poverty line:
Exhibit 2 is real income of non-elderly households:
And Exhibit 3 is employment-based health insurance, whose decline has luckily been offset by public provision:
Things were getting worse for lots of Americans even before the slump. Now they’re getting worse faster.
via Paul Krugman
Perry and Romney can duke it out over who created the most jobs, but governors have as much influence over job growth in their states as roosters do over sunrises.
States don’t have their own monetary policies so they can’t lower interest rates to spur job growth. They can’t spur demand through fiscal policies because state budgets are small, and 49 out of 50 are barred by their constitutions from running deficits.
States can cut corporate taxes and regulations, and dole out corporate welfare, in efforts to improve the states’ “business climate.” But studies show these strategies have little or no effect on where companies locate. Location decisions are driven by much larger factors — where customers are, transportation links, and energy costs.
If governors try hard enough, though, they can create lots of lousy jobs. They can drive out unions, attract low-wage immigrants, and turn a blind eye to businesses that fail to protect worker health and safety.
Rick Perry seems to have done exactly this. While Texas leads the nation in job growth, a majority of Texas’s workforce is paid hourly wages rather than salaries. And the median hourly wage there was $11.20, compared to the national median of $12.50 an hour.
Texas has also been specializing in minimum-wage jobs. From 2007 to 2010, the number of minimum wage workers there rose from 221,000 to 550,000 – that’s an increase of nearly 150 percent. And 9.5 percent of Texas workers earn the minimum wage or below – compared to about 6 percent for the rest of the nation, according to the Bureau of Labor Statistics. The state also has the lowest percentage of workers without health insurance. Texas schools rank 44th in the nation in per-pupil spending.
The Perry model of creating more jobs through low wages seems to be catching on around America.
According to a report out today from the Commerce Department, the median income of U.S. households fell 2.3 percent last year – to the lowest level in fifteen years (adjusted for inflation). That’s the third straight year of declining household incomes. Part of this is loss of jobs. Part is loss of earnings.
More and more Americans are retaining their jobs by settling for lower wages and benefits, or going without cost-of-living increases. Or they’ve lost a higher-paying job and have taken one that pays less. Or they’ve joined the great army of contingent workers, self-employed “consultants,” temps, and contract workers – without healthcare benefits, without pensions, without job security, without decent wages.
It’s no great feat to create lots of lousy jobs. A few years ago Michele Bachmann remarked that if the minimum wage were repealed “we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.”
I keep on hearing conservative economists say Americans have priced themselves out of the global high-tech labor market. That’s baloney. The productivity of American workers continues to soar. The problem is fewer and fewer Americans are sharing the gains. The ratio of corporate profits to wages is the highest it’s been since before the Great Depression.
Besides, how can lower incomes possibly be an answer to America’s economic problem? Lower incomes mean less overall demand for goods and services — which translates into even fewer jobs and even lower wages.
In short, the Perry (and Bachmann) model of job growth condemns Americans to lower and lower living standards. That’s nothing to crow about.