Millions of Americans have lost their homes as a result of the foreclosure crisis. But not until now has one of those stories involved what author Michael Gross called "the world's richest apartment building."
Property developer Kent Swig and his soon-to-be ex-wife Elizabeth are facing foreclosure on their apartment located at billionaire co-op 740 Park Avenue in New York City, the U.K.'s Daily Mail reports. The couple reportedly stopped making payments on two loans worth $16 million over 23 months ago. Real estate experts are stunned that the Swigs were ever allowed to borrow against the apartment, according to the Daily Mail, since it's in violation of the co-op's strict regulations.
Yet the Swigs are far from the first high-income Americans to be threatened by foreclosure, nor the most famous. Others afflicted include R&B singer R.Kelly, who stands to lose his Chicago mansion to foreclosure, and actor Burt Reynolds, who's $1.5 million behind on mortgage payments for his Hobe Sound, Florida estate.
And the foreclosure crisis isn't necessarily over yet, as it was recently reported that delinquent mortgages are on the rise. All too often, these mortgage delinquencies can quickly turn into foreclosure horror stories far more common than the Swigs', including soldiers returning home from Iraq to find his home repurchased that day, or 70-year-old Sharon Bullington's, who lost her home due to a payment mix-up even after negotiating a mortgage modification .
But despite the Daily Mail indicating that the recession "finally [caught] up with New York's mega rich," this is largely a low- and middle-class crisis. As Warren Buffett pointed out in a recent New York Times op-ed, that the recession's effect is so socially-stratified could be due to the differing means of accruing income, with the wealthy relying more on income from capital gains -- the beneficiary of high corporate profits -- and lower class Americans on jobs and wages, neither of which are growing much at all.
Indeed, the gap between rich and poor continues to rise. According to The Atlantic, the combined earnings of the poorest 60 percent of Americans only equals the income of the wealthiest 1 percent, largely due to capital gains.