THE HAMMER AND THE NAIL

I have once heard a phrase, “The hammer is always looking for the nail”. There can be several meanings and explanations for what this phrase means. For me, the answer came at the age of fifteen when I started working as an apprentice for the tool and die maker. My superior had sixteen different hammers in his drawer. One of my duties was to learn how to use each of them.

Many things have changed since then. Today there are other ways to perform the work, and I do not think there is the knowledge of how to use all of these hammers because nor then or now do most people care about how the tools (hammers and nails) are used to do the job (unless they do it by themselves). Most of us do not think what these tools can do but rather focus on the results. I decided to share these thoughts with you after trying to reach my former clients and the real estate agents to see which mortgage solutions I can offer them to better their lives.

Regardless of how good I am, most people see me as a hammer; and my experience and a different way I can help as the nails. After all, people do not need mortgages proper; but rather, a means to acquire real estate or to consolidate debts or use equity to get money for different needs they might have.

During my life I have had many opportunities to use my hands to make a living and I have a lot of appreciation and respect for all workers who use various tools to make our life better.

These three images that I am posting today, are just a small part of my encounters with sometimes “invisible” people.

Enjoy and Share!

HOW TO GET A CONDO APPROVED?

Today is Wednesday, which means it’s time for my next class which is part of the course I’ve created in order to share with you some of the best practices of buying, selling and refinancing condominiums. Today, we are going to touch upon some intricacies one may face at the point of selling a condo.

Before a condominium can be sold and if a buyer requires a mortgage, the listing agent needs to get the disclosure package from HOA. This should include a Lender Questionnaire. If the project has balconies, it additionally needs to have a Building Assessment Report (see the document by clicking the highlighted link above).

If the report indicates any technical problems, they need to be fixed and a Certificate of Completion has to be issued. All of that obviously requires time during which condo can only be sold for cash.

For you to understand better what it takes to get a condo approval, I highly recommend watching a presentation by Suzie De Leon from Angel Oak Mortgage Solutions, recently recorded in our office. You can find the video on my YouTube Channel featured as part of my educational course, “Condos with Manny Kagan: Classes by a Mortgage Broker.”

To be continued next Wednesday, February 5, 2025

***

Need help? Call me: (415) 225-7920

Best wishes,

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

NMLS #205637
DRE #00874630

PLEASE HELP!

We all heard, read or saw images of the devastated fires in Los Angeles. But do you know someone personally who lost their home in the fires? Perhaps coincidentally, I happened to read online about well-known Hollywood actors who owned multi-million dollars homes in the Pacific Palisades. A week later, so many of those homes burned down; not only those belonging to wealthy celebrities.

On Friday, January 17^th, the Wall Street Journal asked the question, “What’s next for Los Angeles Luxury?” One of the fire victims, who “despite the immense personal loss, remains sanguine and philosophical. “It’s man against nature”, he said. “Nature doesn’t discriminate.” More than 12,000 structures have been destroyed. Among those, was the home and two rental properties that belonged to my client who became a personal friend. As we both share a passion about photography, we began to share our work with one another, and a friendship developed. And now all his photo equipment, along with everything they owned is gone.

Of course, he is not alone in this tragic circumstance; however, unlike some of the richer folks, his resources are very limited. Fortunately, one of his friends put together a short video, and his story was covered on the news. 

At the beginning of the year, I suggested 2025 to be the Year of Sharing.

Now we all have the opportunity. Please help the Pazminos. Thank you.

Care and Share!

LET’S LEARN MORE ABOUT
NON-WARRANTABLE CONDOS
AND NON-QM MORTGAGES

Dear Real Estate Professionals, Future and Current Homeowners,

Today, I continue taking you through my course, “Condos with Manny Kagan: Classes by a Mortgage Broker”.

Class III video is available at this link.

Also, be sure to read the notes below and save them for future reference.

Class III, Week 3:

NON-WARRANTABLE CONDOS AND NON-QM MORTGAGES

A condominium is considered non-warrantable if it meets any of the following criteria:

• The project is new construction or incomplete.
• The developer has not transferred control of the Homeowners Association (HOA) to the owners.
• A high percentage of units are occupied by non-owners.
• The community allows short-term rentals.
• A single entity or individual owns more than 10% of the total units.
• The building owner or developer is involved in ongoing litigation.

Non-Qualified Mortgage (Non-QM) programs offer alternative income calculations, often with higher interest rates. These programs can help borrowers overcome issues related to non-warrantable condos and income qualification.

In many cases, mortgage brokers play a crucial role in finding solutions for borrowers. They work with various mortgage banks specializing in Non-QM mortgages. These lenders source funds from financial institutions, insurance companies, hedge funds, or specialty investors.

Becoming a skilled mortgage broker requires years of experience and knowledge. It involves connecting the dots and finding the right lender to close the loan.

With nearly 40 years of experience as a mortgage brokerage company, Pacific Bay Financial Corporation has established strong relationships with multiple mortgage banks. Our dedicated team continuously nurtures these relationships to provide our clients with the best possible solutions.

To be continued next Wednesday, January 29, 2025

***

Need help? Call me: (415) 225-7920

Best wishes,

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

NMLS #205637
DRE #00874630

 

WHAT IS YOUR AGE?

On Monday, January 13^th , was my birthday. I was born in 1947. And when someone asks me, “How old are you?” my answer is sixty plus. The reason is that I do not feel old. My age is defined by what I would like to accomplish in this life.

One of my projects is to publish a book titled, “The Healing Images™. Reflections”. It will contain fifty-four beautiful images of roses, which will help viewers to get into a relaxed state, and the text that accompanies the images will be one sentence from each of 54 chapters in the Torah with my short comments.

The book is almost ready, I hope you will be able to benefit from it sometime in February. At the same time, I do not want you to wait. Starting next week, every Monday, I am going to post one page from the book on Facebook. Please add me as your friend on Facebook so you can benefit from the wonderful experience!

Meanwhile, enjoy these three flowers I’m sending your way.

Care and share with a friend!

CONDOMINIUMS:
TRANSACTIONS TECHNIQUES
AND MORE

Dear Real Estate Professionals, Future and Current Homeowners,

I am excited to continue taking you through my new course, “Condos with Manny Kagan: Classes by a Mortgage Broker”!

Class Two of the series is available at: https://youtu.be/Y2zKHy97BcI

Also, make sure you read the notes below and save them for your future reference!

CLASS II  (Week Two)

…Before moving forward, let’s take a look at who lends money for condos, i.e. where borrowers can get a mortgage. The major institutions, like Bank of America, Citibank, Wells Fargo and Chase are primarily interested in depositors. For those who keep their money in the bank, they might offer adjustable mortgages fixed for 3, 5, 7 or 10 years. These are portfolio loans which might have an interest rate lower than 30 years fixed loans, and are mostly Jumbo loans. To get them, there are two conditions – customers’ money in the bank and being able to qualify for the loan, which might be challenging.

Sometimes banks can offer Conforming loans as well, but these are sold to Fannie and Freddie and have rates similar to other lenders. In the past, banks like First Republic Bank, as well as Silicon Valley Bank, were able to bend the rules just to attract more customers. History has shown that those who did that, sooner or later got out of the business. Then there are medium size banks and credit unions. All of them follow internal guidelines. Sometimes one of them might offer loans where others could not. For example, some of them do not require an HOA certificate. Additionally, there are mortgage brokers who represent a variety of the specific wholesale lenders. Some of which, like Rocket Mortgage, are trying to drum up online business.

Mortgages are divided into two categories — QM (quality mortgages) and non-QM mortgages. Since the majority of the lenders sell their loans to Fannie Mae and Freddie Mac, their underwriting guidance for QM mortgages can be strict. The solution is offered by the mortgage banks who can offer financing for non-QM mortgages. The same lenders also offer mortgages for non-warrantable condos…

To be continued next Wednesday…

***

Need help? Call me: (415) 225-7920

Best wishes,

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

NMLS #205637
DRE #00874630

I LOVE BOOKS!

I started collecting my personal library when I was a teenager in Riga, Latvia, where I was born and lived. In 1972, when I was twenty-five, our family moved to Israel. We packed all our belongings into wooden crates, specially built for such purposes. One of them was filled with books.

The border guards requested to open the crates to check if there was any contraband. Luckily, they started with the container of books. Turned out that the inspector also liked books. We both sat inside the crate, while he checked my books. I offered for him to take any books he liked as a gift. He did, and let the other crates go without opening.

When we moved to San Francisco in August 1980, some of my books followed, after I gifted many of them to my friends in Israel. And soon, as I could afford to buy, new books filled my bookshelves. In our house we have a room I call the “library”, because there are bookshelves filled with books – floor to ceiling. This is a room where I do my morning stretches. And every day my eyes are devouring them. I told myself that I would be able to read all of them when I retire. The problem is that this is not in my immediate plans.

Last week I got an idea. I am going to read one book every week. But my thoughts went further. From time to time, I will share with you some of my reflections after finishing reading. Currently I’m reading a book of poems by Marge Piercy “The Art of Blessing the Day”.

It was a gift from my younger daughter and her husband for Hanukkah. As you might know, I not only read poems, I also write them. My latest book, “42 Encounters with Illumination” has beautiful images of manifestation of light, which I illuminated with poems. You can order it on Amazon.

The three images of reading people you can see above were taken in different times in various places. Meanwhile, I am almost ready with my next incredible book called “Reflections. The Healing Images”, which is going to be available in February.

However, starting next Monday, I am going to post on Facebook every week one reflection together with one “Healing Image” from that book. If you are not yet among my Facebook friends, become one soon to be able to see my healing posts.

Stay Tuned! Care and Share!

MANNY KAGAN’S
EDUCATIONAL COURSE ON CONDOMINIUMS KICKS OFF!

As earlier announced, this morning I launched my new video course, “Condos with Manny Kagan: Classes by a Mortgage Broker”.

It would be fair enough to say that most people know what condominiums are, but not many know how they differ. Those who own condos or are planning to buy one, may not know that the property’s condition can affect financing. This includes owner vs non-owner ratio, as well as HOA budget and Master Insurance.

For starters, there are two types of condominium projects — warrantable and non-warrantable. Warrantable condos are approved by the two government sponsored enterprises – Fannie Mae and Freddie Mae, as well as government guaranteed financing through FHA and VA. To be warrantable, at least half of the units in the building must be owner-occupied. In addition, the community must contribute at least 10% of its annual budget to its reserve account every year. And what if the number of the non-owner units went up through the sale or just because some of the owners moved out without selling their unit and decided to rent? Or if the contribution to the reserves is less than 10%, or the HOA account is underfunded?

In these cases, the property would transition from being approved to the “unavailable” list. This means that yesterday this project was eligible to get a specific mortgage with the minimum down payment and lower interest rate, and now it is not. And the only way to find out about this is to request one of the lenders who can sell loans to one of the government agencies, to check the list in Condo Project Manager – CPM™. There are a number of problems that would put a condo project on the “unavailable” list, such as a lack of insurance coverage, or maintenance issues. If the building has balconies, they need to be inspected; and if necessary, repaired. Therefore, before we start, we need to check the list.

And this is exactly what we do before anything else. Fortunately, the status can be changed if the corrections are made, but this might take some time. Thus, to sell or to buy the unit in a particular condo project, we need to find out to which category project belongs, and the clients’ ability to get financing. This in turn requires determination which lender or program can be used. However, before we can do that, the listing  agent has to order “Home Owner Association Information Request” – and this might take some time…

To be continued next Wednesday, January 15, 2025

Manny Kagan,
President,
Pacific Bay Financial Corporation

Cell: (415) 225-7920
Email: [email protected]

NMLS #205637
DRE #00874630

HAPPY 2025, THE YEAR OF SHARING!

As I’ve mentioned in my last post of 2024, I intend to make 2025 the Year of Sharing and hope that you will join me. The idea of sharing can mean different things for different people. Therefore, I will share with you what it means for me.

In ten days, I am going to be 78. I could retire a while ago, and just focus on writing and publishing photo-books. However, my decision was to keep helping others have a better life, which is my life’s mission. When I set my intentions to assist 97 people with their mortgage needs in 2025, I knew that I couldn’t do it myself; therefore, I need your assistance.

There are many people who would like to reach their American Dream, to become homeowners, as well as others who own homes, but are short on cash and use credit cards to pay their bills. And many who would like to be or already are retired but think that they cannot afford their lifestyle as retirees. All these people may not know that I could assist, or may not know that this is possible. You and I can help them. Just think about sharing this message.

In addition to helping my clients with their mortgage solutions, I am finishing a new photo-book “Reflections. The Healing Images”. It is going to be a very special book. It is designed to help viewers find healing and accomplish their well-being. I decided not to wait until you get the real book. Instead, I will share one of the chapters illustrated with beautiful images every Monday on Facebook. Stay tuned to my FB postings, and make sure you are among my Facebook friends.

Meanwhile, please, enjoy and share with a friend these three images from the book.