Clergy take on mortgage mess

By Martha Graybow

NEW YORK (Reuters) - At the Quail Lakes Baptist Church in Stockton, California, the parishioners at weekly prayer group meetings seek spiritual support for everything from health issues to marital problems to job losses.

These days, many people also are praying about their mortgages.

"There are many people in this community who are losing their homes or in danger of losing their homes, and there are some who have just seen their mortgage payments go through the roof," said the Rev. Marc Maffucci, the church's pastor.

Stockton, a city about 80 miles east of San Francisco that was founded as a gateway for gold miners in the mid-1800s, has one of the highest foreclosure rates of any large U.S. metropolitan area as its once-hot housing market has gone cold. Maffucci said his congregants have sought help through group prayer as well as his private counsel on how to cope.

Many houses of worship around the United States are seeing the impact of the deepening crisis, particularly in urban areas hard hit by homeowner defaults. Clergy are speaking out on the topic at religious services and trying to coordinate assistance for their members and the community at large.

While the financial fallout of the mortgage meltdown has been well documented, the moral dimensions have not been widely discussed, religion experts say. They say they are particularly troubled on a moral level by the explosion of subprime mortgages, which allowed lower-income people with weak credit to buy homes based on attractive teaser interest rates that now are resetting to levels they cannot afford.

Subprime lending is not unethical under Judeo-Christian tradition -- and it can serve a good societal purpose by allowing those who have been down on their luck to get access to capital, said David Miller, executive director of the Center for Faith and Culture at Yale Divinity School.

He and others, though, said that subprime lenders have a duty to charge fair interest and that they also have a moral responsibility not to extend credit to those they know cannot pay it back.