ONLY THOSE WHO WORK
MAKE MISTAKES

There’s an old saying: “Only those who don’t work don’t make mistakes.” I was reminded of that recently — and it proved to be a valuable lesson.

Last week, I was assisting a client purchasing a condominium for $3.5 million with a loan amount of $2.5 million. Their income was verified through 12 months of bank statements, and the down payment — partly a gift from the client’s grandfather — was properly documented. Everything seemed to be on track.

However, I overlooked one important detail: reserves.

Reserves are the funds a borrower must have available after closing — often held in retirement or investment accounts — to cover future mortgage payments. Depending on the lender, this requirement may range from three to twelve months of total housing expenses (principal, interest, taxes, insurance, and HOA dues).

In this case, the client did not have the required reserves, and as a result, the loan could not be approved. The borrower eventually found another lender offering a different program that suited their situation.

This experience served as a strong reminder: no matter how long you’ve been in the business, attention to every detail matters. I’ve since added new internal checks to ensure that the reserve requirement is reviewed early in the process for all jumbo and non-QM loans.

Mistakes are part of professional growth. The key is to learn from them and make sure they don’t happen again.

If you have questions about financing, jumbo loans, or alternative income documentation, feel free to reach out — I’m always glad to share my experience and insights.

Meanwhile, if you want to continue this discussion, you are welcome to watch my YouTube video by clicking this link.

Best wishes,

Manny Kagan,
President,
Pacific Bay Financial Corporation
Your professional mortgage broker since 1983

NMLS #205637
DRE #00874630

 

IN THE SOUL OF THE BEHOLDER

You’ve probably heard the phrase “beauty is in the eye of the beholder.” But last Sunday, I realized—it may also be “in the soul of the beholder.”

That day, I was walking through my neighborhood with a friend. We often discuss the Torah together, and sometimes our views on life couldn’t be more different. For example, he sees a human being as nothing more than a biological machine with a brain. So, I asked him, “If the brain controls everything, where do feelings like love come from?” He didn’t have a clear answer.

After all, the Torah teaches: “Hashem God formed the man of dust from the ground and breathed into his nostrils the soul of life, and man became a living being” (Genesis 2:7).

During our walk, I paused to photograph some roses. My friend asked, “Don’t you already have enough pictures of roses?” I smiled and replied, “I’m not photographing flowers. I’m capturing beauty.”

For me, beauty is not only something I see—it’s something I feel with my soul. And just as important, it’s something I can share—with friends, with strangers, with anyone who needs a gentle reminder that life is more than what meets the eye.

So here are a few roses from one and the same bush. Enjoy them. Care for beauty wherever you find it. And share it generously.

TONIGHT BEGINS YOM KIPPUR, THE DAY OF ATONEMENT

While it’s part of the Jewish tradition, I believe its meaning is universal—this is a time when God looks at all of humanity with love and judgment.

For the next 25 hours, it’s a time of reflection, forgiveness, and renewal. From my heart, I ask your forgiveness if I have ever said or done anything that hurt you, whether I meant to or not. And I want you to know that I forgive you as well.

May we all be written in the Book of Life, and may the coming year bring peace, health, and kindness.

Click here to watch my  brief video message addressing my friends, clients and social media followers.

WHY FAST?

Lately, while exploring different approaches to healthy living as I age, I came across the idea of intermittent fasting. It means choosing certain hours when you eat—or sometimes just one meal a day.

Many studies praise its benefits: lowering blood sugar, reducing weight, lowering blood pressure, calming inflammation, even supporting mental clarity. It sounded appealing, but I also reminded myself that before trying something new, it’s wise to consult a medical professional.

Still, fasting is not only about health. Next week, on Wednesday evening, Yom Kippur begins—the Jewish Day of Atonement. For me, this is always one of the most meaningful times of the year.

Tradition calls for a complete fast, no food or drink, for 25 hours. The body may feel the strain, but the purpose is to lift the soul: to reflect, to ask for forgiveness, and to deepen the connection with God.

One of the challenges, though, is staying awake and alert through long hours of prayer. Thankfully, there’s a short two-hour break. I usually take this time to walk in Golden Gate Park. I breathe fresh air and let my thoughts settle. In the lake I noticed many birds—each busy with its own life, yet somehow reminding me of freedom and renewal.

During my previous visits (not on Yom Kippur)I took three photos, which I’m sharing here. They help me remember that fasting, whether for health or for spirit, is also a way of pausing—to look, to listen, and to find meaning.

Before start of Yom Kippur the common greeting is G’mar Chatima Tovah which means A Good Final Sealing. This is what I wish you.

MORTGAGE RATES JUST FELL
TO A THREE-YEAR LOW

This headline recently appeared in Money Watch. What’s remarkable is that it happened before the Federal Reserve lowered its benchmark rate by a quarter percent.

As soon as the news broke, a number of my clients called to ask if now is a good time to refinance. For many, the answer is yes—especially if you have a large loan balance.

Just last week, I refinanced a client’s loan of over $1 million, reducing their rate from 7.125% to 6.5%, with no out-of-pocket costs. This lowered their monthly payment by about $400. If rates drop again in the next six months, we’ll consider refinancing once more to capture even more savings.

Of course, mortgage rates don’t move only because of the Fed. They’re influenced by broader market forces such as the 10-year Treasury yield, mortgage-backed securities (MBS), and inflation.

While no one can predict with certainty, I believe rates may continue to trend lower—which could improve cash flow for homeowners and help more buyers qualify for financing.

In the meantime, if your mortgage rate is above 7%, give me a call. I may be able to help you bring it down: (415) 225-7920.

Best wishes,

Manny Kagan,
President,
Pacific Bay Financial Corporation
Your professional mortgage broker since 1983

NMLS #205637
DRE #00874630

 

SHANAH TOVAH U’METUKA: HAPPY 5786!

According to  Jewish calendar  on the evening of September 22, the holiday of Rosh Hashanah begins, ushering in the year 5786. Tradition tells us this is the birthday of Adam, the first human, and with him, the creation of Eve.

Perhaps that is why the holiday lasts two days, ending on September 24—because it is not only about one person, but about the beginning of life, the unfolding of all creation.

Ten days later comes Yom Kippur, the Day of Atonement, a time when one cycle ends and another begins—a chance to look back, to reflect, and then to step forward renewed.

During Rosh Hashanah, families gather at the table and dip apple slices into honey, a small but powerful act that says: may the coming year be sweet. The Hebrew greeting Shanah Tovah U’Metuka carries that same wish—a good and sweet year.

And so, when families join together around a table filled with holiday prayers and songs, we celebrate life. We share, we care, we pass the sweetness around. These are the moments that give rhythm and meaning to our days—and this is exactly what I wish for you: a good and sweet year, filled with joy, renewal, and love.

Three images of apples illustrating this story serve as the reminder of the beauty in our world.

Shanah Tovah U’Metuka!

REVISITING THE TOPIC

Not too long ago, I touched on this important question in my social media posts, and I’d like to dive a little deeper today. Many of my clients have been able to buy properties even with very little money for a down payment—and I want to share some insights that could help you too.

That is possible thanks to a variety of down payment assistance programs available on the market. These programs usually consist of two parts:

• The first mortgage, which typically covers 95–97% of the home’s value.
• The remaining amount, which can come from different assistance sources, each with its own terms.

However, there’s a trade-off: because of the assistance, the interest rate on the first mortgage is often higher. This means a higher required income to qualify. In addition, many of these programs have income limits that can affect eligibility.

Recently, during a recent presentation at our office, Lynn Jackson from Plaza Mortgage discussed how FHA loans can offer 100% financing. Click this link to see a piece of Lynn’s presentation. While that sounds appealing, these loans also come with higher mortgage insurance premiums.

That’s why I often suggest another option: using a gift for the down payment. With as little as 5% down, buyers can qualify for first-time homebuyer programs that often carry lower interest rates compared to down payment assistance loans.

And here’s the key: interest rates are expected to come down. When that happens, we’ll likely see another buying frenzy.

Don’t wait—call me today, and let’s structure your transaction the smart way.

Best wishes,

Manny Kagan,
President,
Pacific Bay Financial Corporation
Your professional mortgage broker since 1983

(415) 225-7920

NMLS #205637
DRE #00874630

 

 

HELLO FROM PORTLAND

The title of my story comes from the name of a shop in downtown Portland, Oregon. We came here to celebrate our granddaughter’s fifth birthday. She and her parents live in one of the city’s leafy residential neighborhoods, so this visit was also a chance to explore Portland itself.

The city’s name comes from a coin toss in the 1840s that decided whether it would be named after Portland, Maine, or Boston. Portland has since gathered a bouquet of nicknames—Rose City, Rip City, Stumptown, Bridge City, and even Viva. Each reflects a different chapter of its history. And then, of course, there’s the slogan: “Keep Portland Weird.” Adopted in 2003 and inspired by Austin, Texas, it began as a playful marketing effort to support local music. Over time, it grew into something more—a celebration of individuality, creativity, and alternative lifestyles, along with a healthy resistance to corporate sameness.

Walking through the city, I couldn’t help but notice how many people embrace this spirit. Tattoos are everywhere, a kind of living canvas of personal expression. Portland also takes pride in being one of the most bike-friendly cities in the U.S., with the longest stretch of dedicated bike lanes and nearly 30,000 cyclists.

Each morning, I like to walk along the Willamette River, where a riverside park and shared roadway bring together runners, bikers, and walkers. This path feels like a living snapshot of Portland’s diversity. On one morning, I noticed a man wearing clothes in support of Palestine. Then came another cyclist in American flag shorts and a baseball cap stamped America First. A couple rode past who seemed to fall somewhere in between.

That mix, side by side, felt to me like the essence of Portland: share the road, share the city, and share the care!

JUMBO MORTGAGES EXPLAINED

Mortgages generally fall into two main categories: conforming and jumbo.

Conforming loan limits are set each year by the Federal Housing Finance Agency (FHFA). These limits apply to loans that can be purchased by Fannie Mae and Freddie Mac, and they vary based on both geography and the number of units in the property.

In addition to standard conforming loans, there are agency high-balance loans, which apply in higher-cost areas such as the San Francisco Bay Area.

For 2025, the current loan limits for single-family homes or condominiums in our area are:

• Conforming:$806,000
• Agency High Balance:$1,209,750

Any loan amount above $1,209,750 is considered jumbo. Loans over $3 million are referred to as super-jumbo. Each category has its own underwriting guidelines, and jumbo loans often require alternative ways to calculate income.

Why am I bringing this up? Because just last week, during our staff meeting, Fiona Khan from Wall Street Mortgage (WSM) shared their new jumbo fixed-rate programs. Then, almost immediately, a former client called me about purchasing a $2 million home with 20% down. Naturally, their loan amount of $1.6 million would be jumbo. I received a quote from WSM at 6.25%—a very competitive rate.

Last week, I also attended an open house where the property was listed at $3.885,000. With a 25% down payment, the loan amount would be $2,913,750. At the same 6.25% rate, the monthly payment would be about $17,940. To qualify, the buyer would need an annual income of roughly $600,000.

Fortunately, we have alternative qualification methods that can help clients in situations like this.

Above, I’ve attached The Jumbo Mortgage Flyer for your review. You can also click this link for a printable version.

Meanwhile, feel free to call me anytime at (415) 225-7920 with questions related to the subject matter.

Best wishes,

Manny Kagan,
President,
Pacific Bay Financial Corporation
Your professional mortgage broker since 1983

NMLS #205637
DRE #00874630

 

WHY BUY A SECOND HOME?

Our family’s love affair with The Sea Ranch began in 1986, when we first visited this magical stretch of California’s coast. From that first trip, we were captivated by the ocean views, the serenity, and the beauty of the trails. We kept returning, year after year, until one day — three years later — we mentioned to our real estate broker Cindy Kennedy, how much we loved the place. She told us about a lot where only the foundation had been poured. On the drive back to San Francisco, we decided to stop and take a look.

As I stood there, looking at that foundation and reviewing the drawings, I told my family: “This is our house. ” Of course, the question was: How can we buy it? My first thought was to use a line of credit on our San Francisco home and take out a mortgage. But the real solution came when we decided to sell one of our rental properties in San Francisco, using the proceeds for the down payment.

For the next ten years, Sea Ranch became our family’s favorite destination. Eventually, when it was time to move on, we sold the house but never stopped returning, often renting from others. As the years passed and our finances improved, we began thinking again about buying. But Cindy, now a friend, reminded us of something important: she would only sell us a home if we intended to live there permanently. And she was right — houses on the coast require constant maintenance, and the costs add up quickly.

Today, renting a home big enough for four of us — including our daughter and her husband — can cost $2,000 for just four nights. Buying is even more of a challenge, with most homes at Sea Ranch selling for well over $1 million. Currently there are about 1200 people reside in The Sea Ranch. Some of them are artists. Both myself and my wife are artists as well, however I am not ready to retire yet. For now, we will continue renting other people’s second homes

Three images you can see above, are showing what attracts us to The Sea Ranch.

Care and share!