In Norway the "Boligbyggelag" is a quasi-Coop organisation which is similar to the Danish Andelsboligforeninger.

The deal is that an individual "buyer" pays an entrance fee at a fairly low rate and they are then liable for a proportional share in a collective mortgage loan which typically finances most of the building.

This collective mortgage was subject to a form of insurance against individual defaults.

This model has worked extremely well since the Second World War generally funded by the State owned HusBanken but often sponsored or co-financed by municipalities, typically by providing the land.

About three or four years ago, as a way of allowing people onto the "housing ladder" these vehicles were opened up to developers who promptly built overpriced buildings and aggressively marketed them to young buyers in particular.

The buyers borrowed the "entrance fee" - say £50,000 to £100,000 from private banks - and the banks ignored the fact that the buyers were also taking on the collective debt.

To make matters worse, most of this new generation of Boligbyggelag did not have an insurance bond.

This is all now going drastically "pear-shaped" as a specifically Norwegian variation of sub prime.

Firstly, there is a "Death Spiral" effect, whereby when  one person defaults, and "walks away", the rest of the co-owners are then sharing his part of the  mortgage as well as their own.

Most of these projects are in huge negative equity, and indeed membership cannot even be given away, due to the onerous nature of the collective liability.

Many individuals have complained to the Banking Ombudsman, and already many of the individual private bank loans have been cancelled as a result.

Three different Norwegian ministries are trying to work out solutions to the problem.

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