GAYLORD — When on Sept. 17 the Rev. Steve Scheer of Gaylord Community Church read in the Gaylord Herald Times that Independent Bank began foreclosure proceedings on the church, the news rocked the congregation.

How, he wondered, can the bank foreclose on a customer who’s never missed a payment?

“The church believes that this is an injustice,” said Scheer, in a press release the church issued last week. “In the two and a half years the church has been dealing with the Gaylord branch of Independent Bank, the church has never failed to live up to its financial obligations. The church has made every monthly payment expected of it.”

The foreclosure came as a result of a dream for a 6,400-square-foot facility designed to serve the greater Gaylord area in multiple ways.

“We saw a need for a mid-sized facility in the area; something multi-purpose,” Scheer said Tuesday.

Construction began in 2005, with an $850,000 construction loan from Independent Bank in Gaylord.

Unfortunately, 13 months later, just two weeks before the building was scheduled to open, the final Otsego County building inspector slapped a “condemned” notice on the door. The truss system for the roof was inadequate; too few trusses, and too small. The side walls were beginning to bow out, making the possibility of collapse very real.

“We were in shock,” said Scheer. “Through every phase of the construction we were approved by inspectors. The blueprints from the architect were approved. Those same trusses had been viewed many times.”

Scheer added that early on in the construction process, the builder questioned the number of trusses, and contacted the architect who assured him they were sufficient.

Bad news was made worse when, in July of 2006, Independent Bank stopped payment on the balance of the construction loan, leaving contractors and sub-contractors holding the bag. More than $200,000 was obtained through various fund-raising efforts.

The condemnation of the building rendered the construction “incomplete” which put the loan in “technical default.”

Scheer is reluctant to cast blame. “We don’t know what higher power (in the bank system) is pulling the strings. It’s quite possible that the local branch has no control over this.”

The Gaylord Herald Times contacted Independent Bank Thursday. Bank officials declined to comment, indicating they have “a strict policy on discussing their customer’s business.”

“We are a financial institution,” stated Janice Lucier, Independent Bank, Gaylord branch manager. “Everything we have is held under our privacy policy.”

“The bank approach we’ve always taken with the customers is; as a bank we’ve always been willing to work with our customers who will work with us,” said Gary Dawley, Independent Bank Chief Credit officer.

“When we’re in these tough economic times, when things are topsy turvey, we’re constantly discussing what we can do to assist the customer,” he said, adding, “it takes both sides willing to cooperate to get there.”

“We have been in constant communication with the bank for the past two years in an effort to re-write the loan into a permanent mortgage,” said Scheer. But haven’t been able to reach an agreement.”

“We continue to trust,” he said. “God is going to do something here. We know that He has a plan, and we’re waiting to see what it is. If, in the end, we have to move to another location, He’ll go with us. A building is not the church; the people are the church. Would we like to finish this? Of course. We want to stay here. We feel a responsibility to make this work. But we realize that it may not be possible.”

The Community Church continues to seek resolution to the situation before the foreclosure sale that is scheduled for Oct. 23.

 

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