The Rev. Ephraim Williams preaches an old-fashioned message of responsibility and robust self-sufficiency to his Oak Park congregation of 5,000 – and he means what he says.

"They say I'm old school," said the longtime pastor of St. Paul Missionary Baptist Church, who grew up in Mississippi during the Depression.

"But if I am, why doesn't new school pay the bills? You need to copy old school."

In what's become a tradition of good stewardship, the church will celebrate a mortgage-burning ceremony Sunday, having paid off the $3.4 million 10-year note on its impressive Family Life Center in only six years' time.

It's the third mortgage that church members have retired ahead of schedule. Their last mortgage-burning ceremony, in 2000, celebrated discharging the $4 million loan on the church sanctuary and offices eight years ahead of its due date.

In times of rampant mortgage defaults, the idea of paying off the mortgage seems both eminently sensible and, yes, old school. What's more, in paying off its debt so efficiently, St. Paul is bucking an unfortunate trend for American churches.

Last year saw a record number of churches in California and across the country sold after defaulting on their mortgages, according to CoStar Group, which tracks commercial real estate data. In 2011, lenders foreclosed on 138 churches, up from 24 in 2008.

"It's a different day," said Simeon May, chief executive officer of the Texas-based National Association of Church Business Administration.

Many churches – including Family Christian Center in Orangevale, which was forced into foreclosure in 2010 – have paid the price for crashing real estate values and declining tithes. The dwindling membership of many mainstream congregations has only added to the economic repercussions.

And the crisis continues to resonate in contributions, according to the Barna Research Group, which charts trends in America's faith communities.

Almost 60 percent of pastors in a recent survey told researchers that they were continuing to deal with the negative impact of the economy, and 45 percent of congregants reported reducing their church contributions.

"Across the board, giving is still down in churches," said May. "It's still a tough economy. It's an unusual event these days for a church to pay off the mortgage."

St. Paul has saved huge amounts of money by paying off its mortgage loans early: at least $1.5 million in interest payments on both the church and the Family Life Center, said staff member Lamont Harris.

The center, which opened in 2006 next door to the church on 14th Avenue, was Williams' idea, a way to serve both the congregation and the surrounding community. It features basketball and racquetball courts, a banquet room, bookstore and cafe, day care center, computer lab and classrooms. The soaring lobby hosts a farmers market each week.

Other than the Family Life Center mortgage, said Harris, "We have no other debts."

Long before the church broke ground, a capital campaign raised $3.7 million of the project's total $7.1 million cost.

The church owed $45,000 a month on the mortgage, paid through twice-monthly automatic deductions that accelerated the payoff date. In addition, Harris said, the church made extra payments on the principal of at least $1,000 each week, depending on the amount of Sunday contributions.

The rocky economy led the church to reduce the center's hours – but not to reduce its extra principal payments.

"The pastor is truly averse to putting debt into the church," said Steven Green, senior vice president of Farmers & Merchants Bank, which financed the Family Life Center mortgage.

"It's a more disciplined style. Some folks in younger generations view debt as the way to go. But for folks in the older generation, if you couldn't pay, you couldn't afford it. The Depression generation has a whole different philosophy on whether to borrow."

Williams said his father, a railroad employee named Thornton Williams, instilled in him the philosophy of financial independence that he's shared with his church.

"My father was anti-debt," said Williams. "He said debt was the second cousin to slavery. When you have debt, you can't run away. He was teaching us to manage our money."

When Williams was called to St. Paul Missionary Baptist 41 years ago, the church had 133 members and was housed in a small building on 12th Avenue, a few blocks from the current church. Williams led the remodeling of the old church building, which now houses St. Paul's outreach program, and retired that mortgage debt in seven years' time.

He has also paid off his home mortgage – part of his planning earlier in life to make sure that his wife, Carrie Sue Williams, would be cared for if he predeceased her. She died in 2009.

"I don't mean to criticize modern families, but they're not leaving an inheritance to their kids – and I don't mean money," he said. "What have we taught them? What have we trained them to do and not to do? We're setting kids up like the government has set us up."

Under Williams' guidance, St. Paul regularly offers classes on the basics of budgeting and buying a home. Workshops on how to live debt-free, how to pay off a mortgage early and how to improve credit will take place before Sunday's mortgage-burning ceremony.

The plan is for the pastor to wear a tuxedo for the occasion. Steven Green will bring the mortgage documents, and various dignitaries will light matches while about 3,000 congregants watch from the sanctuary. The president of the California Missionary Baptist State Convention will deliver the sermon, and Sacramento Mayor Kevin Johnson, a church member since his teens, will read a proclamation.

"I remember as a kid growing up watching (the) Rev. Williams model his philosophies," said Johnson. "He's from the South. He's old school.

"He prides himself on setting an example. We don't have to overextend ourselves with debt."

© Copyright The Sacramento Bee. All rights reserved.

• Read more articles by Anita Creamer

Order Reprint