Did the Prosperity Gospel Cause the Housing Crisis?

A couple of posts ago, John pointed us to a recent article in The Atlantic--Did Christianity Cause the Crash?--by Hanna Rosin. The article explores the rise and continued influence of the prosperity gospel (the belief that God will financially bless the faithful) in American Christianity. From Oral Roberts to Joel Osteen, it is a much wider phenomenon than one realizes. From Rosin's article:

Among mainstream, nondenominational megachurches, where much of American religious life takes place, “prosperity is proliferating” rapidly, says Kate Bowler, a doctoral candidate at Duke University and an expert in the gospel. Few, if any, of these churches have prosperity in their title or mission statement, but Bowler has analyzed their sermons and teachings. Of the nation’s 12 largest churches, she says, three are prosperity—Osteen’s, which dwarfs all the other megachurches; Tommy Barnett’s, in Phoenix; and T. D. Jakes’s, in Dallas. In second-tier churches—those with about 5,000 members—the prosperity gospel dominates. Overall, Bowler classifies 50 of the largest 260 churches in the U.S. as prosperity.

The issue that Rosin's article explores is the role of the prosperity gospel in bringing about the recent housing crisis in America. A bigger and better home is one of the common images in prosperity gospel sermons, a clear sign of God's Providence and blessing. More, the faithful should aspire to such houses. In short, did many congregants of prosperity gospel churches end up "stepping out in faith" right into a risky subprime mortgage? It's hard to tell if there is a direct link, but there is a circumstantial case linking the prosperity gospel and home foreclosures:

Demographically, the growth of the prosperity gospel tracks fairly closely to the pattern of foreclosure hot spots. Both spread in two particular kinds of communities—the exurban middle class and the urban poor. Many newer prosperity churches popped up around fringe suburban developments built in the 1990s and 2000s, says Walton. These are precisely the kinds of neighborhoods that have been decimated by foreclosures, according to Eric Halperin, of the Center for Responsible Lending.

Zooming out a bit, Kate Bowler found that most new prosperity-gospel churches were built along the Sun Belt, particularly in California, Florida, and Arizona—all areas that were hard-hit by the mortgage crisis.

The scariest part of the article is how shady loan officers would come to prosperity churches to do "wealth building seminars" for the membership. With the sanction of the church these loan officers would use the seminars to sign up a bunch of subprime mortgages:

The idea of reaching out to churches took off quickly, Jacobson recalls. The branch managers figured pastors had a lot of influence with their parishioners and could give the loan officers credibility and new customers. Jacobson remembers a conference call where sales managers discussed the new strategy. The plan was to send officers to guest-speak at church-sponsored “wealth-building seminars” like the ones Bowler attended, and dazzle the participants with the possibility of a new house. They would tell pastors that for every person who took out a mortgage, $350 would be donated to the church, or to a charity of the parishioner’s choice. “They wouldn’t say, ‘Hey, Mr. Minister. We want to give your people a bunch of subprime loans,” Jacobson told me. “They would say, ‘Your congregants will be homeowners! They will be able to live the American dream!’”

There are almost no words for this. What makes it all so sad is how the prosperity gospel manipulates the poor and middle-class. First by making them ashamed and then encouraging them to take financial risks. All in the name of Jesus.