Category: The Good News with Manny

The Good News with Manny

Flexible Mortgage Solutions™

I’ve recently received a phone call from one of my former clients. I spoke with her over a year ago. She needed money, but I could not help her then because of her credit cards’ debts was too high. We agreed that she would call me back after paying them off with her next commission income. This time, she wanted to refinance her private money second mortgage which she used to pay off credit cards and had an interest rate of 14%. After running her numbers, the result was that I could get her a second mortgage with the rate 9.9% and enough money to pay off her second loan, plus get the extra amount she requested.

However, when I told her that this is going to be a Reverse Mortgage Second, she became very upset. “I am not interested in a Reverse Mortgage. I do not want for the bank to take my home away.” Despite my explanation that this is not true and that banks do not take properties away unless taxes and insurance are not paid and that she has a choice to make monthly payments, she said that she did not want anything to do with the reverse mortgage.

This was not the first time I heard comments about losing one’s house to the bank. I have no idea from where these rumors came from; nevertheless, I decided to come up with a new name. There is a Chinese and Jewish tradition that changing the name changes luck. The new name I came up with is “Flexible Mortgage Solutions™” or FMS.

To benefit from FMS, the homeowner needs to be at least 55 and to have limited income. Property can be inherited, or be part of the divorce.

Flexible mortgages offer many optional solutions. The most important is that the borrowers have the options to choose whether to make full or partial mortgage payments, or not to make any payments until they sell their property or die. In that case, the heirs will have either to keep the property or sell it, paying off accumulated mortgage balance, which is similar to a conventional mortgage.

Tomorrow, I am going to start posting a series of short videos on my YouTube Channel answering your questions about FMS/Reverse Mortgages. You will be receiving alerts from me in your email.
Hope, this will help you and your friends.

Please click on this link to watch my brief announcement.

Stay tuned and share with a friend!

Manny Kagan,
President,
Pacific Bay Financial Corporation

(415) 225-7920; || [email protected]

NMLS #205637
DRE #00824602

The Good News with Manny

HOW TO BENEFIT FROM HOME’S EQUITY

During Corona pandemic, when many businesses suffered, mortgage industry, as well as the real estate, was booming. The interest rates were historically low and everyone could get rates around 3%-4%. As it often happens, the pendulum moved into opposite direction and in spite of the speculation, no one really knows when the interest rates will start going down again.

Meanwhile people continued to spend money on their credit cards which have very high interest rates and had other needs for money. And since values of properties continued to go up and no one wanted to lose low rates, there is the proliferation of the lines of credit (L/C) and second mortgages. In the past, the source of these products were major commercial banks. However, some of them stopped offering L/C, while others became very conservative and limited loan to value (LTV).

As a response to the need, the Wall Street investors through mortgage bankers used the opportunity and started to offer L/C up to 90 percent LTV. Even for the self-employees – by using their business cash flow as the source of income. Some lenders offer L/C for the rental properties. And then for the borrowers at the advanced age who cannot get conventional 2nd mortgages, there are Reverse Mortgage Seconds.

During our recent staff meeting, we discussed some of the opportunities with Debra Kidder Steere from Newfi Wholesale. Follow this link to watch a piece of our conversation posted this morning onto my YouTube channel.

Always feel free to contact me on the phone or by email as showing below.

I promise to help!

Manny Kagan,
President,
Pacific Bay Financial Corporation

(415) 225-7920;  ||  [email protected]

NMLS #205637
DRE #00824602

The Good News with Manny

How to Buy Your First Home
with 1% Down Payment

I remember how in April 1984 (forty years ago) we bought our first home for $224,000. Since I just started in the mortgage business six months prior, we were not qualified to get conventional mortgage. We just had $10,000 for the down payment. The seller agreed to carry her loan with interest of 12% for a year, but I needed to get another $30,000 which I borrowed from friends and clients to whom I paid 15%. A year later, we refinanced the loan with World Savings at 9%. Many things have changed since then. We still live in the house.

Today prices are higher, so are salaries. Thanks to a number of creative programs, people can buy their first house or condo for about $790,000 with 1% down payment and 2% second mortgage forgivable after three years and no mortgage insurance. The Program has income limitations, depending on the property location. The total amount which includes down payment, reserves, closing costs and our 1.5% compensation is approximately $30,000. This amount can be a gift from parents or siblings.

Here is a video fragment of the recorded presentation by Brett Scott from WaFd Bank that he delivered during our recent staff meeting.  Our faces occasionally show up in the upper right-hand corner of the screen. Follow this link for more information.

Feel free to contact me on the phone or by email as showing below.

I promise to help!

Manny Kagan,
President,
Pacific Bay Financial Corporation

(415) 225-7920;  ||  [email protected]

NMLS #205637
DRE #00824602

The Good News with Manny

New Learning Opportunities
Have Arrived!

About 18 months ago, I started a project called Money Solutions Academy (MSA) as an educational video series on YouTube. Until today, those videos were primarily targeting the real estate agents community, for whom I wanted to open more opportunities to reach out to more clients – with creative mortgage solutions.

As I was progressing through, the idea to expand this information to the mortgage brokers community was growing in my mind. Though I’ve been a mortgage broker for over forty years, there are not many young people who have joined our industry. Therefore, I was very pleased when Iryna Haras called me and asked me to teach her how to become a mortgage broker.

In the past I had a course where I taught many students some of whom still make a good living in the mortgage business. This time I decided to simplify the process and to use my time more productively. We are going to work on the real cases of my clients and teach through the experience, which we will be recording and showing through MSA (aka Mortgage Solutions Academy) on YouTube.  I also decided to write a new book as a companion to the course – “Mortgage Solutions for Smart People™. How to Connect 5 P’s.”  

5 P’s = People + Property + Product + Players + Process


The first post in the new series of my videos is about mortgages for the condominiums and about the differences between Warrantable and Non-Warrantable condos, and how this affects the final result in getting and qualifying for the mortgage.

So, please click on this link to watch, enjoy and share this video.

Manny Kagan,
President,
Pacific Bay Financial Corporation

NMLS #205637
DRE #00824602

 

 

 

The Good News with Manny

Every Borrower is Unique

Lately, we have been reading and hearing a lot about Artificial Intelligence. Some claim that it will replace many occupations, like attorneys. How about real estate agents and mortgage brokers? Everything is possible, but not so soon. Of course, if it involves identical properties (like in the subdivisions) and identical borrowers. However, in my over forty years as a mortgage broker I did not meet one yet. Everyone is unique.

Recently, I have received a call from the real estate agent whose father wanted to help her and her brother to buy two-unit building. After running her father’s credit report, I saw that he was not big help, since, as a result of high debts, his credit score was low. Since she was a self-employed, we had to wait two years to be able to use her income. She had sales and earned commission in 2023, however, her last two years income averagely was not significant. Her husband’s salary was $80,000 a year. Her father-in-law was considering to get in the game as well and had money for the down payment, but changed his mind. Brother and his wife had good income, but no money for the down payment.

Possible solution was to refinance condominium owned by mother and to pull out cash, which is going to be a gift. Only after I receive information from everyone and order credit reports, I will be able to calculate how much of the property (preferably two units with an in-law) they can buy. After that I will issue pre-approval letter, and my client will be able to make offers and pray for the acceptance. As you can see, there are no simple cases.

Click on this link to listen to my thoughts about artificial intelligence in a video that I recorded and uploaded for you onto my YouTube channel.

In the meantime, feel free to call me whenever you come across a potential client. And I promise to help.

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The Good News with Manny

There Is a Way to Become Better

Forty years ago, when I became a mortgage broker and together with my wife Elfa founded Pacific Bay Financial Corporation in 1985, I had to learn a lot. I never sold anything before and, therefore, in addition to learning mortgage business, I had to become the company owner, sales manager and, to a certain extent, a psychologist – to be able to deal with my clients most efficiently.

To assist me in all those endeavors, I had many teachers and coaches. On top of attending various seminars and reading uncountable books on different subjects, I got used to regularly listen to audio tapes while driving my car. As new digital sources developed, I began watching and listening to videos and audios online.

One of my teachers was Dr. Wayne Dyer, who passed away almost nine years ago. I was very glad to hear his voice again on a captivating YouTube podcast titled “One Day of This… Is More Powerful than 10 Years of Action”.

I am a firm believer that to become better, regardless what our goals are, we need first to deal with our brain and to connect with our heart. That is why I decided to share this particular video with you, which is available at the link highlighted above.

Enjoy and Share!

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The Good News with Manny

You Can Buy Real Estate
with No Down Payment

One of my recent new clients asked me about how he could buy a two-unit building with no down payment. Frankly, at that moment I had no idea if that was possible. However, as it often happens, when the student is ready, the teacher will appear.

DPA PRO PLUS (Down Payment Assistance Program, 100% combined loan to value FHA loan) appears to be a solution. Compared to the regular DPA PRO program which has a 10% second mortgage and is forgivable after ten years, the PRO PLUS program has many advantages. For instance, it has no income restrictions, and the borrowers are not required to be first time home buyers. And YES, it is available for buying a two-unit building. A loan for two units can up to $1,442,250.

Though those programs sound very attractive, borrowers need to be able to qualify. In some cases, a 3.5% down payment (which can be a gift) will lower monthly payments and therefore makes it easier to qualify.

You can learn more about the subject by watching the attached video which is a fragment of a recording featuring our company’s weekly staff meeting*

Please feel free to contact me with any questions at:

(415) 225-7920 or [email protected]

Enjoy and Share!

Manny Kagan,
President,
Pacific Bay Financial Corporation

NMLS #205637
DRE #00824602

* Scrabble tiles spelling out “No down payment” (Photo: Flickr/Jake Rustenhoven, GotCredit)