Reformed Presbyterian Minutes of Synod 1993

REFORMED PRESBYTERIAN CHURCH 51annual distribution on investments. $658,345 was distributed at the end1992. This policy is to be reviewed after it has been in effect for three years,so a recommendation will be made to the 1994 Synod regarding thecontinued feasibility of this poUcy.We have thirty-four mortgage loans to congregations and individualsas of December 31,1992. Three new loans were made to congregationsand three new loans were made to individuals in 1992.Regarding mortgages, the 1992 Synod referred Paper 92-3 to theTmstees of Synod for review of their poticy on loans for pastor's housing.Our response is as follows:Paper 92-3 from the Great Lakes-Gulf Presbytery states, "We respectfullyask the Synod to request Synod's Board of Tmstees to review itspolicy of requiring presbyteries to guarantee loans for pastor's housing inthe light of scriptural principles regarding co-signing of loans." TheBuilding Loan Fund policy states that "the guarantee of individuals,congregations, or presbyteries may be required." This policy was mostrecendy presented to the Synod of 1989 as part of the Tmstees' report. Inpractice, loan guarantees have been requestedonly in situations in whichthe Tmstees felt the abiUty of the borrower to make regular and continuousrepayment of the loan was uncertain. It should be understood that loanguarantees are not a standard feature of these loans, and, in fact, suchguarantees are rare.There are several references to "surety" found in the Book of Proverbs.The teaching of these passages can be briefly summarized as follows:(1) It is wise to avoid the risk of being surety for someone, particularlyfor someone whose reliability is uncertain. (2) A wise person does notbecome surety for more than he is both wiUing and able to pay. There areat least two positive examples of surety in the New Testament. In theparable of the Good Samaritan, Christ describes how the Samaritan left theinjured man at an inn, promising to pay for whatever his care might cost.In Paul's letter to Philemon, Paul promises that he will make good, sightunseen, any debts incuned by Onesimus. Co-signing of loans is notprohibited by the Scriptures, but it is clear that suretyship should be enteredinto with great care and with resourcesadequate to make the pledge good.Our present practice has been applied to loans secured by real estate. Ithas been used to reduce the likelihood that repayment of loan funds wouldcease due to a default. In situations where the approval of a loan has beencontingent on a loan guarantee, your Tmstees have tried to make clear thatthe guarantee is sought because there is uncertainty about the bonower'sability to make regular payments. We have also been careful that the cosigningparty has the means to make the loan good if this becomesnecessary. In the end, however, it is the co-signer who must make the