8 “We have received Your mercy, O God, in the midst of Your people”. Who have received, and where received? Hath not the same Your people received Your mercy. If Your people has received Your mercy, how then, “in the midst of Your people”? As if they who received were one party, they in the midst of whom they received another. A great mystery, but yet well known. When hence also, that is, out of these verses, has been extracted and brought forth what ye know; it will be not ruder, but sweeter.
Now forsooth all are reckoned the people of God, who carry His Sacraments, but not all belong to His Mercy. All forsooth receiving the Sacrament of the Baptism of Christ, are called Christians, but not all live worthily of that Sacrament. There are some of whom says the Apostle, “Having a form of godliness, but denying the power thereof.” Yet on account of this form of godliness they are named among God's people. As to the floor, until the grain is threshed, belongs not the wheat only, but the chaff.
But will it also belong to the garner? In the midst then of an evil people is a good people, which has received the Mercy of God. He lives worthily of the Mercy of God who hears, and holds, and does what the Apostle says, “We beseech you that you receive not the Grace of God in vain.” Whoso then receives not the Grace of God in vain, the same receives not only the Sacrament, but also the Mercy of God as well....So those who have the Sacraments, and have not good manners, are both said to be of God, and not of God; are both said to be His, and to be strangers: His because of His own Sacraments, strangers because of their own vice.
So also strange daughters: daughters, because of the form of godliness; strange, because of their loss of virtue. Be the lily there; let it receive the Mercy of God: hold fast the root of a good flower, be not ungrateful for soft rain coming from heaven. Be thorns ungrateful, let them grow by the showers: for the fire they grow, not for the garner. In the midst of Your people not receiving Your mercy, we have received Your mercy. For “He came unto His own, and His own received Him not,” yet, in the midst of them, “as many as received Him, to them gave He power to become the sons of God.”...
Source: The Enarrations, or Expositions, on the Psalms (New Advent)