REEDSBURG, Wis. - Dozens of Reedsburg area business and property owners said Monday they are facing foreclosure even though many have never missed a mortgage payment.
The move will force many owners to downsize their operations, but BMO Harris Bank's decision is perfectly legal, mortgage experts said.
Dave Gonzalez's flag-making company in Reedsburg is safe because it's financed at a different bank, but his nonprofit church in Lake Delton is in jeopardy because it didn't make enough money, Gonzalez said.
"We've never been behind on a payment, always had more than enough money," he said. "What business does a church have acting like a business and making a profit? If we get money in, we should take care of the community -- the people that have financial needs -- and preach the gospel."
As many as 52 owners face losing their property, sources in Reedsburg told WISC-TV. One confirmed he was laying off some employees, while another had already moved to a new facility.
Less operating income coupled with falling property values compelled the bank to act, said one business owner, who asked to remain anonymous.
The widespread foreclosure decisions will be a burden on Reedsburg's economy, said Dave Estes, the city's mayor. Estes said he wasn't sure how many businesses had been affected.
The decision comes after BMO Harris, a subsidiary of the Canadian lender Bank of Montreal, took over the assets of The Reedsburg Bank. A bank spokesman declined to answer why the lender was removing from its books businesses that hadn't missed payments.
"The Reedsburg market remains an important one for us," said Patrick O'Herlihy, a spokesman, in a phone message to WISC-TV. "We cannot, however, comment on the accounts of any specific customer due to privacy concerns."
Banks have the ability to opt out of commercial loans because of contractual terms, mortgage experts said.
Gonzalez, whose church has 250 members and reaches people statewide on TV, said the economy won't be the same.
"Anytime a business goes out of business, for whatever reason -- whether it's legitimately they go out of business because they're not doing business, or they run into hard times, or there are other factors involved -- that hurts everybody else," he said.
He said he was shopping for another lender to continue his church property loan.
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