The Giant Pool of Money - The Hands-Down Best Explanation of the Credit Crisis

I've read more articles and descriptions of the Sub-Prime Mortgage Mess and current 'credit crisis' than I care to admit.

It wasn't that I was looking for answers myself, per se. And I always felt I had a fairly good handle on what went down from having witnessed it, more or less, from my front row seats.

Really, I kept looking because I was searching for someone, intelligent - neutral and capable of telling the story in its entirety in order to better explain the situation to my clients. Mostly because they were getting a lot of sound bites with very little substantive answers.

There was a Money magazine editor who tried - and he did a pretty good job. A NY Times article came out last year that was also really good, a bit technical, but fair I thought. Almost all the blog postings I came across that attempted it ended up with extreme views on either side, 'greedy mortgage broker' this and 'evil stock broker' that, fueled by the 'always deceptive real estate agents'...

...(Cue the angel music)- then along came Ira Glass. My hero!

All joking aside - this week's free download of This American Life narrated by Ira Glass, entitled 'The Giant Pool of Money', single-handedly explains, in layman's terms, what happened, why it happened, and how it affects everyone - not just those who are homeowners or those who are facing foreclosure. I have to say, there wasn't any description or story included that I disagreed with, and more to the point I learned several things that I previously did not know.

I highly recommend taking the time to download and listen - you can also subscribe to the podcast for free at the iTunes Store where they post a new podcast every Monday. It is well worth the time regardless of whether you are a past, present, future or never-to-be homeowner.

And ultimately, the current credit crisis has ended up impacting everyone. More so than I even realized before listening to this podcast myself.

Read more about the episode here.

Download the MP3 of the podcast here.

To Rent Control or Not to Rent Control - That is the Question - Prop 98 Heats Up

From today's SFGate,

Proposition 98 was written as a restriction on eminent domain that would prohibit the government from taking property for the benefit of a private party. Opponents say it would do far more: define "private" and "take" in terms so broad as to effectively overturn the state's approach to managing development and affordability.

The clause attracting the most attention is one that would ban government-imposed limits on what landlords can charge tenants. The change wouldn't affect existing leases, but once renters move out, property owners in cities with rent control laws, such as Berkeley, Oakland and San Francisco, no longer would have to limit price increases on those units. [more...]


Differing views on measure to end rent control [SFGate]
How Rent Control Drives out Affordible Housing [CatoInstitute]

Individual Tax Bills for Tenancies in Common One Step Closer

As we first reported back in September of last year (courtesy of the 'head's up' from Gordon over at Plan C), it looks as though Phil Ting from the San Francisco Real Estate Assessor office is looking to make good on his offer to help clarify the oft confusing, record keeping nightmare facing many Tenancy in Common owners come tax time.

As it stands, there is one stunning tax bill sent out to all Tenancies in Common, regardless of how many individual units exist within the TIC, or how long the TIC has been in existence. That tax bill, in it's simplest form, is split by the individual owners based on their percentage of ownership of the Tenancy in Common. The trick begins once an owner sells, or remodels - thereby triggering a reassessment (aka increase) in property taxes - the increased portion of the tax bill then becomes the responsibility of the offending owner whether they are the new kid on the block or someone looking to update.

Now, take a six unit TIC that's been around for oh, I dunno, say 10 years, which has seen several resales, a few remodels, and voila! - Dante's Hell of accounting.

To stave off any confusion, Ting plans to send out notices in July to all known Tenancies in Common, along with the yearly notice of assessed value, clarifying the city's policy on separate assessments for TICs and how to request one. It's important to note that simply getting a separate tax bill does not exclude every owner of the TIC partnership from being liable for both their share as well as the whole, in the event one owner falls behind. Thus reiterating the importance of a great TIC agreement and reserve account.

S.F. may clarify TIC units' tax liabilities [SFGate]
Calling ALL Tenancy in Common Owners [SFHomeBlog]
Mapping San Francisco's TICs [SFHomeBlog]