A Reisterstown synagogue facing foreclosure is one of an increasing number of U.S. houses of worship suffering in the continuing financial slump.
Susquehanna Bank filed to foreclose on Adat Chaim in March, saying in court papers that the 27-year-old synagogue had defaulted on an $800,000 loan taken out in 2005. The Lititz, Pa.-based bank, which filed the case in Baltimore County Circuit Court, listed remaining debt of more than $756,0000.
Once nearly unheard of, foreclosures on houses of worship jumped to record numbers nationally in the past two years, showing that religious facilities are not immune to the wave of foreclosures that followed the bursting of the credit bubble.
Adat Chaim's leader, Rabbi David Greenspoon, declined to comment when reached by phone, saying: "Thank you for your call. Have a nice day," and then hanging up. The synagogue board's president, Art Wolf, did not respond to requests for comment.
But the foreclosure case surprised one Adat Chaim member, who said the congregation had adhered to an agreement with the bank to make payments on the interest.
Adat Chaim is struggling with the same issues that plague houses of worship of all denominations. The synagogue, which opened its current building on Cockeys Mill Road in 1993, has seen its membership dwindle from as many as 300 to its current 95.
Steve Fort, the congregation's membership chairman, said the synagogue would persevere.
"We're not closing," Fort said.
Fort, who joined Adat Chaim about five years ago, said members were hopeful about finding a new location to rent.
"We're moving, and we have some places in mind," said Fort, who added that the synagogue — which also runs a school — seeks to increase its membership as well.
He acknowledged that keeping and attracting new members is a challenge.
"With the way the economy is, when people give things up, the first thing they give up is their religious affiliation and synagogues lose members," he said.
At the same time, property values have dropped for religious facilities just as they have for other real estate. Lenders, who have tightened standards in the wake of the credit crisis, have become less willing to work with religious institutions if they run into financial trouble.
Moreover, many banks won't lend to religious facilities at all, said Stephen Ferrandi, a principal and director of religious property brokerage and trade with KLNB Worship, an Ellicott City-based subsidiary of real estate brokerage KLNB.
"The scrutiny from lenders has gotten much tougher," said Ferrandi, who added that most churches get commercial loans that banks could require be paid off within five years.
A five-year analysis by real estate information company CoStar Group showed that the number of religious facilities forced into sale because of foreclosure has reached record highs: 132 in 2010 and 138 in 2011. Only 24 such sales occurred in 2008, reported CoStar, which said that only a few churches had been foreclosed upon nationwide before that.
"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," Scott Rolfs, managing director of religious and education finance at Ziegler, a Chicago-based investment bank, told Reuters in March.
Stephen Trapnell, a spokesman for Susquehanna Bank, said he could not comment on the Adat Chaim case.
Many houses of worship are up for sale, said KLNB Worship's Ferrandi, whose company now has 10 listed.
A few of those congregations are growing and seek larger quarters, but most are shrinking and can no longer afford to keep their property, he said.
"We have more listings today than we've ever had," Ferrandi said. "The supply of churches has overwhelmed the demand for churches. More and more people are no longer going to their neighborhood church."Copyright © 2015, The Baltimore Sun