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.

"One of the interesting questions that should be asked of subprime mortgage lenders, is, 'would you take this loan out on your own home?" said Gary Moore, a financial adviser in Sarasota, Florida, who writes about religion and investing.

"That's the Golden Rule. But I bet there's not 1 in 100 that did. If more of them just thought about that for a minute, it would have prevented a lot of this."

At the same time, religion experts say that many homebuyers may have acted immorally by living beyond their means and that borrowers are required to try to make good on their debts. They cite a verse in the Book of Psalms that says: "The wicked borrows and does not pay back."

The housing crisis has deeply troubled the Rev. Michael Surufka, of the Catholic Shrine Church of St. Stanislaus in Cleveland, Ohio's Slavic Village neighborhood, another area hurt by high foreclosures.

He said the neighborhood drew numerous property "flippers" in recent years who bought dirt-cheap homes, made cosmetic improvements, then inflated prices well above market value based on rigged appraisals. Homes then were sold to unwitting buyers who could not afford the mortgages.

"If Dante were to rewrite 'The Inferno,' I think there would be another ring in his hell for unscrupulous property flippers," said Surufka, who has discussed the housing crisis frequently in his weekend homilies.

"It is not only a social and economic crisis, it's evil," he said. "Not to sound too pedantic about it, but people elsewhere in the country are making huge amounts of money by destroying neighborhoods like ours."