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Christianity Today, August, 2008 |

Cornerstone Falters

Real estate investments bankrupt Presbyterian-affiliated group.

Ken Walker | posted 7/10/2008 09:27AM

Four years after sustaining injuries in an accident that killed her first husband, Kathy Woody-Deming of Clermont, Georgia, took early retirement due to physical problems.

However, she now plans to apply ...

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Nathan

Posted: July 15, 2008 2:32 PM


Yes, halflight, except how does a fund investing in church buildings go broke due to commercial real estate failures? And this isn't the first time for these same people the story goes.

wesh	Posted: July 14, 2008 6:18 PM

"the great majority of its loans were risky second mortgages, one reason it was able to charge up to 10.5 percent on new loans." There are no solid real estate investments that provide 10.5% cash returns on an ongoing basis. If is sounds to good to be true, there is a 98% probability it is a lie. This stuff is geared to suckers, the poor, the elderly, and the uneducated, etc. The idea of getting something for nothing [perhaps this is greed or just delusion] is common place today. In finances, it is the tortise that wins.

halflight

Posted: July 10, 2008 6:09 PM


It's natural for investors who have lost money, like the Demings, to feel somehow cheated. However, a publication like Christianity Today should be careful before it repeats allegations of wrongdoing in a financial failure. If there have been no SEC or state securities regulation enforcement actions against Cornerstone management, that should be stated along with the Demings comments.

halflight

Posted: July 10, 2008 5:51 PM

I worked as an attorney doing securities filings for church-related bond companies. Most problems resulted not from dishonesty or greed, but from naivete and inexperience. Most of our clients came to us after they had been sanctioned by a state for violating securities regulations, but the violations were almost always unintentional. I see nothing in this article that indicates that the prospectus and advertising materials intentionally misled Cornerstone's customers; nor is there anything to indicate an ongoing SEC or state securities regulator investigation for fraud. Unfortunately, most investors don't read the prospectus they receive from the bond seller nor SEC filings (as the article states). They buy investments with little knowledge of the level of risk involved in the investment. The fact that investors "thought" Cornerstone was doing something with less investment risk isn't relevant. What is relevant is the information in the prospectus they received from Cornerstone.

Scott McCarty

Posted: July 10, 2008 4:44 PM

I am surprized how far we Christians have wandered from the teachings of the New Testament we like to crow about. Did not the Lord Jesus tell us to avoid accumulating earthly possessions for our selfish usage ? Notez the words "selfish usage" = just to see how much we can make. How many of us take to heart1 Timothy 6 : 6 - 10 ? I know how the folks feel who lost it all. After selling house and property after my mother's passing, I gave it in 1998 to a close friend to invest to help us with monthly interest for our missionary work in France (since 1971). It all disappeared after 7 years; all of his family also lost everything invested. Our worldly environnement has so penetrated Christian thinking that we act as the world does. From my vantage point in France, I am dismayed to observe that Christians think the USA is a Christian nation with a Christian president. We need to meditate seriously more often 1 John 2 : 15 - 17

Sterling

Posted: July 10, 2008 3:12 PM

Eric, would you be more pleased if this was a liberal church losing money for innocent people and not a conservative one? It is sad in either case and theological bent has nothing to do with this, greed does. I love how some of the posters on these forums can take any issue and twist it to bang on liberal churches and liberal theologies. More shady dealings with money and people's lives goes on under the cover of conservative theology then in liberal churches. Pastoral abuse, financial malfeasance and so forth. You know why? Because when you're certain you have all the answers, you never have to doubt that your motives are always of God. Us liberal sinners still question ourselves, and therefore our human motives more readily then conservatives. I pray for all the innocent people hurt by this poor financial management.

Eric B.

Posted: July 10, 2008 12:30 PM

I am unfamiliar with the Presbyterian Church of America (PCA) denomination, so I do not know if it is a "liberal" church, in the same way that its cousin Presbyterian Church USA is liberal. If PCA has distinguished itself from PC USA, by refusing to carry on in the liberal tradition, then it is particularly sad to see its investment vehicle fail. As an Evangelical Christian, I believe that it is important to pray for other Christians and for Churches that dare to depart from liberal theology in favor of adhering to God's principles and instruction, as set out in His Word, and through the words and life of Jesus. I pray that God will bless the financial offerings and investment pursuits of Churches who humbly follow God's will.

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