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