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Sublime lending

"Sublime lending" Continued...

Issue: "Not over till it's over," Nov. 1, 2008

Mission: Bethel New Life's SmartSavers program provides incentive to live on less and save for a down payment on a home, even for those with low incomes. When clients meet initial savings goals, the ministry begins matching every dollar saved with two dollars, helping to build momentum toward qualifying for a mortgage. In the meantime, the organization teaches classes on basic personal finance and offers pre-purchase and post-purchase seminars. Likewise, the Lawndale Christian Development Corporation emphasizes education as a primary means to lead people into home ownership but away from bad loans. Both organizations participate heavily in the construction of affordable housing, both to rent and sell.

Community Development Corporations-nationwide

Context: The country's foreclosure crisis has hit urban and suburban populations alike-and shows little sign of slowing down. The number of foreclosures this past August was 27 percent higher than that of a year ago, according to RealtyTrac, which maintains and publishes the most complete national database on the issue.

Mission: Community Development Corporations, many of which explicitly adhere to a Christian worldview, are more interested in long-term community stability than putting any one family or individual in a home. Central Detroit Christian CDC, one of many similar small groups throughout the country, builds new homes and rehabs old ones in the interest of providing affordable housing. The organization operates on the strength of unpaid volunteers and builds personal relationships with clients that can help prevent the private financial woes that often lead to foreclosure. The New Kensington CDC services neighborhoods in Philadelphia, where it offers budget counseling, requires low-income borrowers to obtain training before loans, and constructs affordable options for low-income buyers.

Christian credit unions-nationwide

Context: Creative subprime lending is not new, but its widespread popularity is. A booming real estate economy drove many lenders to feature exotic products or face losing clients to those institutions that would. The need to stay competitive pushed many brokers to trade in balloon payments or negative amortization loans all for the sake of quoting a smaller monthly payment.

Mission: Most Christian credit unions throughout the country resisted the temptation to push risky loans in what seemed a risk-free economy. One such institution, the Christian Community Credit Union in San Dimas, Calif., wholly avoided the subprime market because as Executive Vice President Dave Estridge says, "It's just not wise financial stewardship, presuming on the future appreciation of properties. Fortunately, if we didn't look out the window or read the newspaper, we wouldn't necessarily think there was a major financial crisis out there." That perspective is not uncommon among Christian credit unions, many of which loan primarily to ministries and churches and consider it an obligation to the gospel that every measure is taken to avoid mortgage defaults.

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