It is Not About the Amount, But What It Can Do For You

Would you like to get 3.25% fixed for 7 years?”

When we focus on the destination, we will find a way to get there.


How do you think a client would react when he received a call from me that his loan request for $2,200,000 was approved? It would replace his existing mortgage of $1,200,000 at 5.50%. The new interest rate will be 10.50% and will cost 4 points or $88,000, plus closing costs of about $5,000 to get it. You probably would think that the client, who was very happy for that wonderful news, had lost his marbles.

What I did not tell you is that the client is a contractor. He owns an old house in a prime location. He is planning to rebuild it by adding 4,000 sq. ft. After he finishes construction, the new house could be sold for over $4 million. Now you can do your own math. The interest cost is going to be $231,000 plus the closing cost of $93,000, subtract those numbers plus the loan amount from the sales price. The balance is the profit (minus taxes and real estate commission) and suddenly a 10.50% interest rate is no longer such a big deal—especially since the client is not qualified to get a construction loan from a commercial bank.

The title of this story came from my assistant Samantha, after I shared with her a conversation I had with a friend. He came to me for marketing advice. While listening to him, I was squeezing a yellow rubber ball to increase blood circulation in my fingers to relieve some discomfort in my pinky. I picked up this ball as a freebee at a conference. On one side of the ball, there is a smiling face and on the other is a marketing message. I showed him both sides, pointing out that in a given moment we are both looking at the same ball from opposite sides and getting a different message. But in the end—neither of those messages are important. Since the purpose of squeezing the ball is to relieve stress or to increase blood circulation.



The same goes with getting a mortgage. Borrowers are often fixated on securing a fixed rate and not on improving their cash flow. The result can be like a recent conversation I had with a client. Their current mortgage of $635,000 (They can pay it down to $625,500 to get a better rate), has an interest rate of 5.25% and monthly payments of $4,000 plus $300 for the mortgage insurance. We started talking about refinancing a while back when the fixed rates were at 3.50%, but she never sent me the paperwork. I called her recently suggesting that they send documents to be ready when rates will come down again to which she responded that she was only interested if the rate was 3.50%.


 Today (after rates went up), they can get 4.50% for 30 years fixed rate or 4.00% fixed for 7 years, with the savings of $182 a month between those two options. At the same time in comparison with their payments today, the savings could be $1,300/month. Would you wait for to get a lower interest rate or act now?


The buildings in Havana, Cuba  (as you can see in my images), might be good candidates for improvement. As far as getting construction loans—it is a different story. You can join me in December on our trip to Cuba to check out more development opportunities. Please do not procrastinate. There are limited seats on the plane.

Do not keep me as a secret.


Best Wishes,


You Cannot Reverse Age, But You Could Possibly Reverse a Mortgage

“Wine and cheese get better with age. How about people?

Some do.

Others get wiser.”


Marcelo at 95

A few weeks ago our telephone rang at 7:30am on a Sunday morning. The Caller ID showed the call was coming from New Jersey, so I knew that it was our dear friend Marcelo. He beat me to wish me a “Happy Father’s Day.”
Marcelo is turning 97 in August. His wife died some years ago, followed by his girlfriend. Now he has a new one (a younger woman, of course). When I asked how he is doing, he said without complaining, that his sight is not good anymore and he had fallen down, broken his nose, and needed stitches on his forehead.

But he added “I am alright now”.

“I do not hear well”, he continued, “and when I fell down my hearing aid broke. But I am getting a new one which works better”, he added. “I have difficulty bending down”, he said, “but a young woman comes over every day now to help me”.

And then he switched to politics. “Obama does not know what he is doing and World politics stink, but otherwise ‘Baruh Ha Shem’—Thank God everything is good”.
Marcelo has lived in many parts of the world and speaks seven languages. At the beginning of World War II, he lived in Paris. As a Jew from Lithuania, there was no way out (but through a concentration camp). One day, he was walking down the street and overheard a conversation between two men.

“You can go to the Argentinian embassy and tell the council that Victor sent you to get a Visa.”

Without hesitation, he did just that. A month later, he was on a ship to Buenos Aires. In spite of the many challenges in his life, he is always optimistic.
We came to celebrate his 95 birthday two years ago, and it was a great party.

Judy–Marcelo’s friend
A few months ago, Marcelo called and asked if we do reverse mortgages. We do. Reverse mortgages are loans, which can be given to persons starting at the age of 62. One does not need to have income or credit score to qualify. As long as there is sufficient equity in the property (preferably with no existing loans, or with a very small balance), borrowers can receive a substantial amount of money in the lump sum or in installments. I write about this program in more detail in my second and forthcoming book, “Mortgage Solutions for Smart People: 5 Easy Ways to Get Your Loan Approved”.

A woman I met on the street
The cost of getting it and the cost of mortgage insurance is deducted from the amount of the loan before distribution. The interest is quite low and accumulates during the life of the recipient. When a person dies, if there is equity left, it goes to the heirs.
This program is not for everyone and since real estate values have dropped, many cannot benefit from this opportunity. After I explained to Marcelo how the program works, he decided against it. He thought he will manage and besides he wanted to leave more to his grandchildren. There are talks that it is going to be more difficult to get those loans, but so far, as long as there is lendable equity, some borrowers enjoy the money milked from their home, without the need to repay it.


I met this man at the Farmer’s Market in Gualala.


I like to photograph wise people. Not only because of their wisdom, which is not always obvious, but also because many of them show their character without inhibition and do not pretend to be what they are not.

On my trip to Cuba in February, I met a lot of wise women and men—and so can you. We are going there again in December for the Havana Jazz Festival. You may join us.

Do not keep me as a secret.


Best Wishes,


What the Mortgage Industry Can Learn From Zuni Café

We have only one stomach with a limited capacity, but our brain has no limits. We need to feed them both; so choose your food carefully.”

zuni1 The meeting place


When I am asked which is my favorite restaurant in San Francisco, without hesitation—my answer is Zuni Café. Despite the misleading name, it is a large restaurant located on Market street (between Gough and Franklin Street). We’ve been going there for at least 23 years. In San Francisco, we are blessed with many great restaurants, and since we often eat out, we have been in many of them through the years.

We go to Hayes Bar and Grill for very good fish before concerts at Davies Symphony Hall. We go to Firefly, a neighborhood restaurant on 24th and Douglas, for excellent eclectic cuisine. There is a new small Greek restaurant on West Portal called Orexi, where the food is as good as at Kokkari, downtown. There is a Vietnamese restaurant, The Slanted Door, in the Ferry building (and its smaller version, Out The Door, on Bush and Fillmore).Outerlands, is at the end of Judah street close to the ocean, and is one of the city’s jewels if you are willing to wait to get a table since they do not take reservations.

The list goes on and on. There are probably a few new ones opening as I write this letter! Restaurants are a tough business and to survive for a long time and still draw loyal customers is a very high achievement. (I am proud that our company—Pacific Bay Financial, which has been in business since 1985, is also in the same league.)

What makes Zuni Café so special is that they stick to the basics: good ingredients, a good diverse menu, very good chefs, well-trained employees (waiters, bartenders, and service personnel), systems and of course—the management.


But what the mortgage industry can really learn from Zuni Café is their speed of execution. On our most recent time there, we were seated in front of the kitchen and watched the action. The kitchen staff worked with such speed and precision. Everyone moved very fast, sometimes running with one goal in mind—to serve the customers.
Ugur Tartuk worked by the stove preparing the famous chicken for two and my fish order, and could work at every kitchen station. Meanwhile, Ken Turner conducted the food distribution process. Thanks to him, we got our orders in the shortest possible time.
I looked around and did not notice any regulators, who would taste every dish before it was served. And no one sends a customer’s iPhone over a hundred pages of disclosures, claiming that the food they are about to eat can cause an increase in weight and the wine they are going to drink can make them drunk. Such things are the customer’s choice; therefore, please do not sue the restaurant nor the rest of the world, if this happens. Regretfully, this portrayal is what is going on in the mortgage business.
And because the regulators enforce “financial protection” without any regards to the customers’ real needs, the mortgage process has become very tedious and slow.
I doubt if the mortgage industry will adopt the good service practice offered by Zuni Café and other good restaurants soon. Well at least after a stressful and tiring work day, we can enjoy a good meal with friends.
Adriane Harrison, who conducts the restaurant’s traffic, always greets you with a smile.


Gilbert Pilgrim, the owner, in a blissful moment.


I decided to write this story on the spur of the moment while dining in Zuni Café a few weeks ago. The part-owner, Gilbert Pilgrim (who is a very good chef), was dining there as well, and I asked his permission to take some photos with my iPhone. I wish I could photograph everyone who always serves us with a smile. But meanwhile, enjoy some of the images.

The next time you have difficulty to make a reservation, tell them that you are Manny’s friend. If this will not work, call me, and I will use my connections.

Some of my clients are choosing a loan fixed for 7 years with the interest rate 3.375%, which significantly improves their cash flow. What are you waiting for?

Do not keep me as a secret.


Best Wishes,

Manny<br />

Even When We Celebrate Independence, We Are Interdependent

Too much light makes us blind — not enlightened.”


You are probably reading this the day after the celebration of the American Independence Day, which we usually associate with parties and fireworks. Bright sparks fill the dark sky and often it is a very spectacular scene. But if not for a dark sky, no amount of light would have the desired effect. During the Creation of the World in the Torah, God said:

“Let there be light” and there was light. God saw the light was good, and God separated between the light and the darkness. –Genesis 1:3-4

Every photographer knows that too much light can “kill the image”. Therefore, the best time to shoot photos is in the morning or in the afternoon when the sun is not so bright. To have an attractive image, there has to be a good balance between light and darkness.

Unfortunately, those who created regulations to control the mortgage loan origination process did not study photography. Those who created the Consumer Financial Protection Bureau, which resulted from the Dodd-Frank act, have no idea that too many disclosures in the environment, that is already flooded with information (light) will “kill” any information about the possible pitfalls that may result when getting a mortgage.


After the stressful process of finding real estate property and ensuring qualification for a mortgage, the borrower receives about 114 pages of the government’s regulator mandated disclosures online. Since the appraisal report cannot be ordered until these documents are signed and forwarded back, no one in their right mind will read any of those disclosures. So who needs them? And whom is the government trying to protect?

Meanwhile, our small mortgage bank hired 20 employees, headed by an attorney, whose job it is to ensure that the disclosure process is followed exactly as prescribed. Before the change, the bank’s underwriters could finish 5 loan applications a day, now only 1 ½. In the past, our processors could process at least 10 loans a month, but now with the added huge stress from the confusing paperwork—only 5.Who do you think is paying for the increase in costs of getting a mortgage? Ask yourself, do you need all this “financial protection”?

I love America. I love the Mortgage Business. I love my clients. I even like that more people are employed, but I do not like how regulators, who did not read “The Mortgage Game: The 5 C’s and How to Connect Them”, are telling all of us how to run the mortgage business.




I like to photograph images with light as the subject. The photographs in this newsletter are part of my large collection. I hope you will soon be able to see more of my photo work, since I am planning to have a show.

The interest rates started to inch down. Do not wait until they get lower. Start the paperwork now.

Do not keep me as a secret.


Best Wishes,