Making Late Payments on Mortgage Loans
Georgia case illustrates potential effects of missing loan payments.

Background. The Georgia Supreme Court ruled that a bank's failure to reject and return late payments made by a church on its mortgage loan did not prevent the bank from foreclosing on the church's property. A church purchased property on which it operated worship services and church activities. The purchase was financed by a local bank which retained a mortgage to secure debt for the amount of $184,000. The church signed a promissory note agreeing to pay the principal in 34 installment payments of $2,003 followed by a balloon payment of $166,000.

A few years later, the bank informed the church that the balance of the note would be accelerated unless the church paid $10,000 to cover past due amounts. Specifically, this amount was needed to cover the nonpayment of two monthly payments plus a check the church had issued that had been returned for insufficient funds. The bank gave the church 30 days to pay the past due sums and to make good the insufficient funds check, but required that any such payment be by cashier check, money order, certified funds, or cash.

Log In For Full Access

Interested in becoming a member? Learn more.

Related Topics:
Posted: January 1, 2002
View All
from our store
Managing Church Facility Use

Managing Church Facility Use

Find insights to equip your church to host members and strangers.
Planning a Church Building Project

Planning a Church Building Project

Learn about zoning laws, property sales, church construction, financing, and more.
Church Fundraising Campaigns

Church Fundraising Campaigns

Discover tips on raising and borrowing money.
Avoiding Church Lawsuits

Avoiding Church Lawsuits

Create proactive procedures to avoid common reasons why churches most often go to court.

ChurchSalary

ChurchSalary

Let ChurchSalary do the work. Get personalized compensation reports for staff and pastors.