Banks foreclosing on churches in record numbers

Welcome to the morning roundup. Here's a look at what's news in banking and finance.

Church foreclosures. Banks are foreclosing on churches across the U.S. at a record pace, data show, Reuters reports. Last year, 138 churches were sold by banks, a record annual number, and much higher than the 24 sales in 2008. Small to medium-sized churches in Georgia, Florida, Michigan and California have been hit the worst. Many of the banks end up being bought by other churches.

Side deal. Bank of America has reached a separate mortgage deal with states and federal agencies that will provide deeper principal reductions for about 200,000 underwater homeowners, the Wall Street Journal reports. The deal, which will allow the bank to avoid $850 million in penalties, will reduce the loan amount down to the value of the home. The broader settlement has banks reducing loan amounts to 120 percent of the home's value.

Perpetual TARP. While the big banks like Bank of America have long since paid back the money received as part of the TARP program, some smaller institutions may never pay back the bailout money, according to the GAO, the Wall Street Journal reports. About 350 banks, most of them smaller, remain in the program. The government has already turned a profit on TARP, however.

Bank documents to be unsealed. A batch of documents related to a lawsuit by Overstock against Bank of America and Goldman Sachs will be unsealed after a judge's order, Bloomberg reports. The company alleges that the banks manipulated its stock price. The documents will detail transactions that could contain fraud or risky actions.

BofA could be sued in embezzlement case. The city of Seattle may end up suing Bank of America after a city employee took $1.1 million worth of checks made out to the city and deposited them into his own account, the Huffington Post reports. The city did not due business with Bank of America.