“It all sounds like a classic tale of the bust except that, unlike ordinary people caught up in foreclosure proceedings, Gluck and his partners have made a fortune off Riverton Houses. Just as homeowners often take out some extra cash when they refinance a property, team Gluck pulled out $67 million — the high-roller version of cash at closing. A homeowner would be on the hook for that extra cash, but Gluck’s group purchased Riverton through a limited liability shell company, which allows it to shelter its refinancing windfall in case of a default. Minus the down payment, the partners walk away with nearly $42 million. The Riverton deal exemplifies a strategy known as predatory equity: Backed by private equity funds — which get their money from pension funds and wealthy investors—real estate players like Gluck were able to generate massive down payments during the boom. This allowed them to secure interest-only loans for high-risk bets on affordable housing.” (07/09)