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Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.

I recently bumped into a past client, who reminded me of how I “saved his neck, big time,” and expressed how appreciative he still was. At the time, he called me for a rate quote on a home he was looking to buy – with no mortgage contingency – that needed to close within 45 days. He was a few days into a contract to buy a home “all cash,” and the $540,000 was due in about six weeks. He was looking for the best rate and someone who could assure the closing before the deadline. No one knew at the time, including me (until now), that he didn’t actually have the money needed for closing if he didn’t get a mortgage. He was at risk of losing his fifty-four thousand dollar contract deposit.

I recall that our initial interaction was very brief. I quoted him a rate comparable to a mortgage broker he spoke to – except I was charging him an additional fee of $6,000. Of course, he didn’t consider my offer and went with the other mortgage person. Unfortunately, there was an issue documenting all of his income, and with the credit score he had, the other broker was unable to get the loan approved. He frantically called me, detailing what happened and asking if there was anything I could do. He now had two weeks to close.

I listened intently and confirmed that I could still get him the mortgage in time – but it was now going to cost him $10,000 in fees. Before he could accuse me of taking advantage of him for being in a desperate situation, I assured him that the extra four thousand dollars were not going into my pocket. Based on his circumstances, I needed the extra money to handle a specific credit repair item. I also needed to pay to expedite the reporting to the credit bureaus to tweak his FICO score within a few days. The other broker was skeptical and said it was not possible. As I am sure you guessed, the loan closed on time, and he gladly paid the necessary fee.

The notion of “paying for expert advice” reminded me of a remarkable anecdote I heard years ago. A highly successful ocean freight company had a significant shipment from their top client that was required in a week. Unfortunately, their only ship large enough to transport all the cargo was grounded with engine failure. If they didn’t meet the deadline, they would lose this account and over 30% of their annual revenue. The ship’s owners tried one expert after another, but none of them could figure out how to fix the engine.

With time running out, they were referred to one final person who had long retired from doing these kinds of repairs. At 7a.m. the following morning, an extremely elderly-looking gentleman punctually appeared up at their dock. They immediately brought him to the engine room, but he insisted on a tour of the entire vessel. He didn’t speak much but was writing a lot and had a stoic look on his aged face. He dismissed himself to grab something from his truck and returned to the engine room carrying a small bag with him. Two of the ship’s owners were there, watching this man’s every move. After a few moments in thought, the old man reached into his bag and pulled out an old cast-iron wrench. He gently twisted a small two-inch valve on the right side of the engine. Instantly, the engine lurched into life. He carefully put his wrench away. The engine was fixed!

A week later, the owners received a bill for ten thousand dollars. “What?!” the owners exclaimed. “He hardly did anything!” They called the man’s office and left a message on his antique answering machine demanding an itemized bill. Two days letter, an envelope was hand-delivered at 7a.m. from the old man with a handwritten invoice. The page read: “Tightening the engine valve – $10.00, Knowing which valve to tighten – $9,990.00.”

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