Romans 4:5 – But to him who does not work but believes on Him who justifies the ungodly, his faith is accounted for righteousness. (NKJV)
Many modern Lutherans take the phrase “who justifies the ungodly” to mean that God has already “objectively” justified all the ungodly who have ever lived, without faith. This is not only contrary to the text, it is also contrary to the historic Lutheran understanding of the text. Here is Johann Gerhard’s interpretation of that phrase in Romans 4:5.
From Johann Gerhard’s commentary on the first six chapters of Romans (translation mine):
With ἀσεβῆ [ungodly], the ungodly is not understood as remaining securely in his ungodliness without repentance (Prov. 17:15), but as he comes out of it through repentance and faith. This one is judged as righteous before the judgment of God through the imputed righteousness of Christ and is absolved from sins, since compensation has been made for his sins through the satisfaction of Christ. Therefore, such a penitent and believing man, who is certainly ungodly and sinful in himself, is nonetheless righteous in Christ through faith.