LESSONS I’VE LEARNED IN HAMBURG

After eleven days cruising from Lisbon to Hamburg, we’ve arrived at the final mooring: one of Germany’s three city-states and a place with a rich maritime legacy. Hamburg has been a major port for centuries, and it still feels like a global crossroads. I’ve met people from all over the world here—many of them speak English so fluently, you’d never guess it wasn’t their first language. In fact, I read that you can live here quite comfortably without ever speaking German.

But as vibrant and cosmopolitan as Hamburg is today, it carries the weight of a painful history. Just eighty-two years ago, during World War II, British and American forces bombed this beautiful city, destroying nearly three-quarters of its buildings and taking at least 37,000 lives. Thousands more were injured. It’s hard to imagine such destruction when walking through Hamburg’s peaceful streets now.

The same sense of contrast followed us throughout the cruise—whether in Portugal, Spain, France, or Germany. Each stop had its own scars from that war. And now, fittingly, as we prepare to travel to Berlin, our arrival will coincide with May 8th – Victory Day in Europe.

Eighty years later, Europe is still standing. Not only that—it’s standing together. Despite internal challenges, the continent speaks in a shared voice, often in the language of the very nations that once tore it apart.

History is full of cycles—conflict, rebuilding, peace, and hope. The devastation may feel overwhelming when you look at the numbers or read the accounts. But if Hamburg can rebuild, if Europe can unify, then maybe one day other regions, like Israel and Middle East, can, too. I hope so. I pray so. And I invite you to join me in hope and prayer.

Take a look at the three photos I placed inside this story. They show how old and new buildings coexist in Hamburg. If buildings can do it, why not people?

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WHAT IS PIGGYBACK?

Piggyback is the technique used in the mortgage business to accomplish very specific results when the first mortgage is combined with the second at line of credit. For example. I had a client who was buying a house for $1.9М. He only had 10% for the down payment. Since his loan amount was slightly over $1.7М, which is called jumbo, it had higher interest rate, required mortgage insurance, had a qualifying ratio of 43% and required 6-month reserves, which he did not have.

So, I divided it into two parts. The first mortgage of $1.2М was a conforming loan, hence it had lower interest rates and no mortgage insurance requirement. The remaining $500К was the second loan. It had a higher rate, but allowed combined qualifying ratio to go up to 49%, i.e. a lower income was needed to qualify, and there was no need for the reserves! That is how piggyback works.

Some clients use piggyback loans in anticipation of getting an extra money within short  period of time and the intention to pay the second loan off. We also arrange second loans and lines of credit up to 89.9%, but these serve a different purpose.

Need assistance? Don’t hesitate to contact me – call (415) 225-7920, or email at [email protected] 

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

NMLS #205637
DRE #00874630

CRUISING THROUGH LIFE

I had to check the date the other day (it was actually Wednesday, April 30) because I’ve completely lost all sense of time and space. We’re out in the Atlantic Ocean now, cruising and stopping at different ports in Europe aboard a ship run by Norwegian HX (formerly Hurtigruten).

This morning, we took a stroll through a tiny French town. I munched on a fresh baguette and sipped hot chocolate (honestly, I don’t even remember the town’s name). Back on the ship, I had a big salad for lunch and then took a nice, hour-long nap.

…Our journey started in Lisbon, Portugal (where I even interviewed the real real estate agent). Then we sailed to Porto, though it felt way too crowded for my taste. After that came Spain, including charming San Sebastián – a place we’d love to return to and explore more of. Yesterday we docked at a tiny fishing island off the coast of France, and tomorrow we’ll stop somewhere new (haven’t heard the name yet).

This whole voyage ends in Hamburg, Germany. During each stop, the guides often reminded us that just eighty years ago, these places were embroiled in bloody wars. Now, on this ship of 500 passengers, half of us are from various parts of Germany – and with the crew from Norway and the Philippines, basically everyone on board is chatting in English. In fact, there are people here from 23 countries.

Meanwhile, out in the world, things are pretty chaotic: wars in Ukraine and Gaza, an explosion at an Iranian port involving Chinese cargo, blackouts back in Portugal and Spain after we sailed away, a killing in Sweden, and elections happening in Canada. And through it all, mortgage interest rates stubbornly refuse to go down, and our office back home is as busy as ever.

All of this is going on while you and I are just cruising along – living our lives, encountering events (or “stops”) that we can only react to and talk about. It’s funny how it feels like life is one big cruise, isn’t it?

So, what’s my conclusion? I actually figured this out a while back after writing my book 42 Encounters with Dog Lovers – so much so that I put it on my business card. (If you don’t have the book or the card, feel free to ask for both just by sending an email to me). Here are the seven lessons I learned from Max, our beloved labradoodle:

• Life is a game.
• Life is short.
• Life is sharing love.
• Life is a journey.
• Life is making new friends.
• Life is a cycle.
• Life is learning.

I’ve picked out a few snapshots to share the expressions of love I’ve encountered along the way. You can find more stories in my book 42 Encounters with Love – I even had a reader who ordered ten copies for his whole team!

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HOW TO BUY REAL ESTATE
WITHOUT REPORTED INCOME?

I recently helped a client secure a $1.5М cash-out loan based solely on his $6М investment account. This was made possible through an “asset depletion program.” Several lenders offer this program, which typically calculates qualifying income by dividing total assets by 60. However, one lender used a 36-month divisor, which significantly increases the calculated monthly income and makes it easier to qualify.

We discussed this program during our recent video presentation with Robin Kozelka from Acra Lending. She also introduced another option I wasn’t previously aware of: a mortgage based on remaining invested assets.

For example, if you have $1.5М in investments and are purchasing a property for the same amount, you could put down $500К. As long as you retain $1М in investments, the lender may offer a $1М mortgage—without requiring traditional income documentation to qualify.

Need assistance? Don’t hesitate to contact me – call (415) 225-7920, or email at [email protected] 

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

NMLS #205637
DRE #00874630

FROM MORTGAGE BROKER
TO… MORTGAGE BLOGGER

There are at least two reasons why I started my Telegram blog, “Manny Kagan’s Retirement Solutions”, dedicated to helping individuals navigate the challenges of retirement. As someone who’s reached this milestone myself, I’ve seen firsthand the issues that can arise when people stop working. Suddenly, they have a lot of free time and less money, and problems they never anticipated starting to pop up.

That’s why I recommend approaching retirement not as a point of discontinuing being your former self , but as a transition into a new stage of your life. This requires preparation, a change of habits, and a shift in environment. For instance, saving money for retirement is crucial, but so is taking care of your body and health in advance. It’s also essential to plan where you’ll live for the rest of your life and whether you can afford to stay in your current location.

Through my blog, I aim to share practical advice and insights from my own experiences and those of others. When I was writing my book, “Retirement Solutions for Smart People: How to Accomplish Financial Comfort”, I thought that in addition to covering reverse mortgages, I would dwell on other aspects of our lives during retirement. However, this would have delayed the book’s publication. Instead, I decided to be sharing those topics with you through my blog.

If you enjoy reading my “Fridays with Manny” stories, you might also appreciate my speaking – after all, I’m a storyteller at heart. My new posts go live on Mondays, and you can sign up on Telegram to stay updated. My books are available online, and I always welcome your questions and recommendations.

The three images illustrating my today’s story are from my book.

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“WHAT ARE THE RATES?”

One of the first questions clients or real estate agents, who never worked with a lender or a mortgage broker, ask “What are your rates?” This is a wrong question.

First of all, interest rates based on the variations of the 10-year T-Bill are in constant fluctuation. And then it is impossible to quote the rate before we know the client’s particular condition which include the credit score.

Then there is source of income and the source of the down payments if it is a purchase. Then the question is which lender can finance this transaction. All of this can make the difference. Since rates are only available upon the lock, we have to write after the quote (subject to change).

However, situations can be even more complicated, as you may learn from the recent presentation in our office made by Robin Kozelka from Acra Lending.

Need assistance? Don’t hesitate to contact me – call (415) 225-7920.

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

NMLS #205637
DRE #00874630

WHAT COMES FIRST –
THE BUNNY OR THE EGG?

How is it possible that Easter, a holiday celebrating Jesus’s resurrection, has so many pagan nuances despite being a cornerstone of the Christian tradition? Take the Easter Bunny, for instance. This rabbit, or “Easter Hare,” brings Easter eggs in a basket. But where did this tradition come from?

The Easter Bunny was first mentioned in Georg Franck Von Franckenau’s 1662 book “About Easter Eggs.” In pre-Christian pagan traditions, rabbits symbolized fertility and new life, representing the rebirth of spring associated with the Goddess Eostre. This is believed to be the origin of the word “Easter.” Seeing a rabbit was also considered a good omen.

What about the eggs? Online explanations often cite eggs as symbols of new life, rebirth, and Jesus’s resurrection. I also discovered that coloring eggs for Easter stems from a blend of pagan and Christian traditions.

 

Another Easter tradition involves decorating homes and churches with White Easter Lilies, which represent purity and evoke the idea of trumpets sounding the message of Christ’s resurrection. Instead, I was tempted to share with you these three images of calla lilies, which I find more elegant.

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Happy Easter!

 

LISTING, LENDING, BUYING AND TAPPING

After sharing my story about co-ops last week, I received an email from a real estate agent I’d never worked with before. She had an upcoming listing in a co-op building with deferred maintenance and asked if my co-op lender could handle the loan. I reached out to the lender to see if they’d worked with this building before and requested a deferred maintenance report from the agent.

Shortly after, I received another inquiry from a different listing agent. This time, it was about a condo with technical issues that had been resolved, but the work hadn’t started yet. I sent the condo information to seven lenders, and only one agreed to lend on the project.

The takeaway is simple: if you’re listing or buying a condo or co-op, send me the details ahead of time to explore financing options.

Check out this link for the video where I talk about the above topics and touch upon the art of tapping. You may also want to learn how to attract more clients using Client Magnet Tapping Technique by Brad Yates.

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

NMLS #205637
DRE #00874630

 

HOW TO TELL A STORY

Some time ago, I started writing a novel. And then, other projects interrupted that project. Since I just finished another book, “Reflections”, I am considering returning to my other writing project. Meanwhile, I am listening and watching YouTube videos about how to write a good story. Besides the plot and the players, there must be challenging circumstances.

Of course, the best way to learn is to read other stories. And this opportunity presents itself on the evening of Saturday, April 12^th, which is the first night of Passover. This is the time when Jews and their friends gather around the festive Seder table and read the Passover Haggadah, which recounts the Jews’ Exodus from Egypt. This tradition goes back to 170 CE. Not only is this an old story; but it also fits all the criteria of a good narrative, in that it reflects events which took place in the 13^th century BCE.

In addition, outside of Israel, Passover and reading of the Haggadah happens over two nights in a row, providing the opportunity to celebrate and to hear the story twice. Passover is celebrated over eight days, and this year its culmination is on April 20^th, which is the date for the Christian holiday – Easter. I will share with you an interesting history of Easter next week.

Passover (as well as Easter) is a celebration of spring, i.e. rejuvenation, awakening from the slumber, to which the three beautiful images can attest.

Happy Passover!

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CONDO LOAN APPROVAL:
THE IMPORTANCE OF
ENGINEERING REPORT

During the last few weeks I have shared with you three major pitfalls lenders might have with lending on the condominiums. They are: engineering report SB 326, availability on the Fannie Mae and Freddie Mae lists, and insurance coverage.

I think it is important to hear directly from Sierra Pacific Mortgage about how the lender handles these issues. We have recently had a zoom meeting with the bank’s representative Milo Wishart. A seven-minute piece of his presentation is available at this link.

I was about to send the above message to you when an email from a lender hit my inbox, and it really made my day. Here’s what it said: “Hi Manny! I have some good news. We have an improvement to our guidelines around SB 326. We can now approve the loan based on the work having been completed on the subject property. Even if there is still outstanding work to be done on balconies for other units, we can do it.  We would just need to include the plans for the remaining work and approve all details in Prequal stage.  But at least SB 326 is not a hard stop for us any longer!”

IT IS ALL ABOUT CARING AND SHARING!

Best wishes,

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

NMLS #205637
DRE #00874630