Hello, this is my first diary here. It has already been posted and did pretty poorly at DailyKos until being rescued. It is a story of pain and suffering and I believe it is a decent prediction of things to come.
This is an old story from 1994 that has some relevance today. It is a story from a Democratic administration but the victims were forced to deal with a Republican resolution. It is a story that I had to live through.
I live in a 3000 unit apartment complex in the Bronx. It is a massive dwelling on 22 acres that was built in 1961. There was a conversion from a rental property to a cooperative in 1987, the last breath of a housing boom. A complete renovation made the property much more desirable.
In order to sell many apartments very quickly the holder of unsold shares steered new shareholders towards seven and ten year balloon mortgages. People believing in their own upward mobility put up ten percent and made smaller payments that paid down just a small amount of the principle.
When these balloon mortgages ended so many of those loans were with defunct savings and loans and many residents ended up at the mercy of the Resolution Trust Corporation. Not only were many tenant/shareholders in big trouble, because of the RTC it looked like the entire complex was going to fail.