UCC church switches mortgage loan to the Cornerstone Fund after 12 years with another lender
A “win-win” is how Denise Gander, treasurer of St. John’s United Church of Christ in Merton, Wisconsin, describes her church’s current mortgage loan situation with the Cornerstone Fund, with whom they began a relationship in December of 2014. They finally feel confident they’re borrowing from a lender they can trust, who will treat them as a loyal and valuable customer. Additionally, they love that their loan actually supports other UCC projects, including churches in need of financial assistance. Their situation wasn’t always a win-win, and Gander hopes that by sharing their story, other UCC churches experiencing similar problems will consider Cornerstone as a financial solution.
Back in 2002, St. John’s began construction on a new building. They chose a local bank as their lender. In 2008, St. John’s started a building expansion. Various lending institutions were visited, but they decided to stay with their current lender, hoping it would be an easier process. The lender surprised them by requiring personal guarantees of $400,000.00, but St. John’s complied, justifying the change because they were borrowing significantly more money.
Several renewals later, the mortgage came due in July of 2014. Necessary reports were filed and by May they were told that renewal shouldn’t be a problem. It turned out to be a big problem that took five long, agonizing months (from July until December). During that time they were asked for additional information and informed that personal guarantees would not decrease as in the past. The lender didn’t follow through on contacting the members to acquire personal guarantees, nor did they return phone calls or emails. Gander says she was at a loss as to why the lender didn’t respond to their inquiries. “After 12 years as a loyal customer, with an excellent payment history, and a property value that far exceeded the new loan’s amount, it made no sense that the bank was dragging their feet on sending a new contract.”
They continued to make regular payments, but essentially had no loan, which meant their interest rate increased to 18%. Opening a monthly statement and seeing their loan amount increasing aggressively was completely frustrating after years of hard work paying the mortgage down.
Finally, in October, they received paperwork, but it was only a loan extension from July until October and the new contract expired just two weeks later. At the next council meeting they voted to pursue a loan with the Cornerstone Fund. In early December, the bank verbally offered them a new three-year loan with very strange terms: 15-year amortization at 3.9%, with the loan split in two parts: one with personal guarantees and one without. “That was the last straw,” said Gander.
Looking back on the entire situation, Gander believes the bank was not renewing the loan in an attempt to dissuade them from continuing to borrow from them.
“When I called Cornerstone I spoke with real people who were responsive, willing, and eager to work with us.” Gander recalls the peace of mind they experienced when receiving verbal confirmation that their loan was approved—just a few days after submitting their loan application! By mid-December, St. John’s was a Cornerstone borrower with a five-year loan and a 30-year amortization. Although their former lender offered them an interest rate one point lower than Cornerstone’s, they felt it was worth the added expense due to the advantages of borrowing from Cornerstone. To sum up the experience, Gander exclaims, “What a relief!”