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Real Estate Agent Podcast Episode 87: Exposing Mortgage Loan Secrets With Alejandro Szita

Episode 87: Exposing Mortgage Loan Secrets With Alejandro Szita
March 11, 2022

President of Prosperity Lending Alejandro Szita is a mortgage expert who exposes loan secrets to help business owners and entrepreneurs seeking homeownership.

 
I started absolutely from nothing for two or three years. So I would say from 9 to like 11 o'clock at night nonstop, even during the weekends for three years, I slept on the floor. I had an apartment, but I didn't have a penny to buy a bed.

Alejandro Szita

About This Episode

Alejandro Szita explored a few industries  before finding his true calling as a mortgage expert. Born in Chile, Szita eventually made his way to the U.S. and worked hard to find success in California’s competitive real estate market. 

Today, Szita is the President of Prosperity Lending, and he’s exposing mortgage loan secrets that benefit business owners and entrepreneurs looking to become homeowners. 

Pre-order Alejandro Szita’s book, Money—What It Is, How It Works, and How You Can Use It to Create Wealth and Prosperity for Yourself and Your Community, here.


Connect with Alejandro on LinkedIn and learn more about Prosperity Lending on their website.

Episode Transcript

Brett: Hey there and welcome to Shoptalk, the real estate show. I’m Brett Van Alstine and on today’s episode, we’re joined by Alejandro Szita. Szita is the President of Prosperity Lending, helping expose mortgage loan secrets that benefit business owners and entrepreneurs looking to become homeowners.

Today we talk about the doors Szita opened to find his true calling as a mortgage expert, what a mortgage is, and how Prosperity Lending helps Americans become homeowners.

Brett:

Alejandro. Thank you so much for taking the time and joining me on the podcast today,

Alejandro:

Brett, thank you very much for having me and for the opportunity to be of value to you and to your listeners.

Brett:

Well, thank you very much. We appreciate that. I'm sure that you will. So can you give us a quick overview of, you know, who you are and how you got started in real estate and then the mortgage industry?

Alejandro:

Yes. my name is Alejandro Szita. I'm a real estate mortgage broker, and I'm a real estate mortgage broker. And I started in this business back in 2005. I was coming from a marketing background. I used to have a marketing company with a business partner and we used to sell through infomercials. So I was coming from an infomercial background. You know,, those commercials on TV, like RO appeal. Sure. By now by weight, there is more, that was sort of my background. And I came into the real estate because one of my infomercial clients approached me one day and he said, Alejandro, would you like to come to a financial seminar? And because since the age of seven or six, I've always been interested in finance. I thought, you know, this is an opportunity why not? And this is how I started in real estate.

Brett:

Wow. That's the that's that old adage of, you know, when you're presented new doors, you just kind of have to open them up and see what's on the other side.

Alejandro:

Yeah. And it came at the right time because at that time I was looking for something else and I thought, well, this could be an opportunity.

Brett:

Yeah, of course. Well, look at you today and I'm sure that you were pretty happy that you ended up going to a seminar.

Alejandro:

It was an adventure. I tell you that it was an adventure.

Brett:

I bet. I bet. So, you know, when you, ultimately, after the, going to that seminar, what kind of happened next for you? Did that kind of spark that, you know, interest in you did that reignite that flame for, you know, getting into finance as you had said, you were interested in that from a very early age. So after the seminar, was it just like, okay, this is, this is what I'm gonna be pursuing now.

Alejandro:

I think that your guest, you know, remember that guest that was talking that you had on your other postcard, Mrs. Alvarez yes. She touched on that and I tend to agree with her that sometimes you are doing, or you're following your path, that you don't know exactly where it's going to, to actually lead you to yes. At the time I was looking, for another op opportunity for another area, I thought that finance suited me because I liked that area. And I started to do loans that that was basically what the seminar was about. The seminar was about how to use money in the most effective way and how to build reserves and how to build the future, a financial future for you. Okay. It was a seminar that had to do with the world financial group. I don't know if you've ever heard of that. It's not necessarily related to real estate. It's related to life insurance, how to use life insurance as a vehicle in order to build wealth. But I thought it was very intriguing. Everything that they were saying was very intriguing.

Brett:

Sure, sure. That sounds like that. Yeah. so when you kind of got started into it into this field, did it come naturally to you? Or did you find that you kind of had to put a lot of work into it to, you know, educate yourself and fully immerse yourself into it?

Alejandro:

It came naturally to me, but what was, what I was not aware of at the time is the degree of education and of effort and training that I would have to go through. In my first job, I went to work for a broker and to do loans. And then the broker said, you know, in order to do loans, you need to get a real estate license at the time. I didn't know that it, in this state, in, in, in, in Southern California, there are like four pathways to get a license, to get to, to, to do loans. Okay. So when he said, you know, you, you need to get your real estate license in order to do loans. I assumed that that's what I needed to do. Right. And that's what I did. I studied, you know, I bought the course. I remember my first date in real estate, a class. I did not understand a single thing. It was a weekend. No, I, it was a weekend course, Friday, Saturday, or Sunday after I went Friday to the course, I came back, you know, I had to drive like an hour, an hour and a half because the course was really far away. Geez. At the time I was with my girlfriend and she said, how did it go? And I said, you know, I don't think I'm cut out for this business. I could not understand the single thing of what the guy said.

Brett:

That was the truth. Oh, I'm sure. Yeah. That must have been pretty overwhelming just to kind of go there. Yeah. Not only, you mean, but you also drove such a long, long time and then you get there and you're like, wait, this is completely over my head.

Alejandro:

It's completely over my head by Sunday night, she says, well, how is the system to you now? I said, you know, they are offering that. You can redo this for 50 bucks. I'm gonna take it because really, I don't think I'm cut out for this business.

Brett:

Well, at least you,

Alejandro:

So I

Brett:

Go ahead, sorry.

Alejandro:

So I paid the $50. I went again. And by the time that I did again, I thought, you know what? I think I can do this.

Brett:

Yeah. That's what I mean. It just shows that you know, when you're persistent and you stay committed to something that it'll pay off.

Alejandro:

Right. And one thing that I would like to say that I made add value to your listeners is this, there is one thing that the, that the instructor said that to this day, I always, I always use and I always do. Okay. He said, whenever you do a loan, whenever you get into a real estate transaction, the first thing you do is run a title profile or a title report. Yes. At the time, I really did not understand what he meant. Sure. But after being doing this for like 17 or more years now, I know that he was completely right. And now even today, whenever, before I touch anything, the first thing I do, I log into the title company and run a title profile.

Brett:

Sure. Yeah. And that makes sense. You kind of wanna see what the history is for that property and if there's any sort of clouded titles that come with that.

Alejandro:

Correct.

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Brett:

Nice. Okay. you know, I guess I, I would like to dive a little bit more into the mortgage end of it. I think that that will provide maybe the most education for our listeners just based off your expertise in that field. So to start off, can you just tell us a little bit more, you know, what a mortgage is, how do they work? You know, where does this money come from? And when someone ends up paying their mortgage off, like what happens after that?

Alejandro:

That is a very interesting topic. I'll try to answer it as succinctly as I can.

Brett:

Yeah. There are kind of three parts to that. So

Alejandro:

Yes. So, so one misunderstanding that, that lot of borrowers have, and people have in general is they think that because they have good credit or bad credit, they will be able or not able to obtain a mortgage, but that's not entirely true. A mortgage is basically a financial instrument that is leveraging on your stream of income on your stream of cash. So basically what you're saying to the lender is this is my stream of income. This is my stream of cash flow. And I want to leverage that and I want you to give me a loan. So 90% of the loan is showing what your cash is, what your stream of income is. And there is a bunch of rules that the lender would follow. And that is basically what you are putting up front or what you are leveraging is your stream of income. So that tells you right away that if you don't have cash or you don't have a stream of income, you will not qualify for a loan. Even if your score is a hundred. And even if you're going to buy a house with a 99 point percent down payment, and you only want to borrow 0.1%. So the most important thing is cash flow to have cash flow. And today they want you to have cash for at least two years. That's the number one thing.

Brett:

Okay.

Alejandro:

That's good. Now. Yeah. After that, the second thing that the lender looks at is your credit report, but they don't look at your credit report to actually approve you or, or, or deny you, they look at your credit score to price it because the way that loans are granted is on a risk model. Sure. I, I, I don't particularly agree with the risk model. And there is another organization in the United States called NACA and ACA, which makes loans not based on the risk model, but 99% of the loans that you're going to see are based on that model. So look at your credit score to actually price it. The credit score will determine whether you pay 3%, three and a half, four or five, or if it's too low, then you will not qualify for a particular mortgage product. And then the last thing that lenders look at is the actual collateral, in this case, the property that you're going to buy.

Alejandro:

And I see this all the time, people come to me and I say, look, my house is almost paid off. You know I see half of it paid off. I have a lot of equity. How come I cannot get a loan? And the answer is if, because the collateral is just one of the three elements and it's actually the least important one, the most important one is the stream of income, then your credit score. And then the quality of, of, of, of the collateral and the amount of equity that you have on the collateral. Now, there are hundreds of loan programs and there are different criteria. And if, all you have is equity, then you can get another type of loan called a hard money loan, which is a completely different style of loan. It's a, they only look at the equity that you have, but that is another world of lending in the traditional world of lending it's the stream of income, credit score and, and, and collateral.

Brett:

Okay.

Alejandro:

Okay. I don't think if that answers your question.

Brett:

No, no, that does help.

Alejandro:

And, and there is one more thing that I would like to add, which is very interesting, which I was shocked when I found out is in many cases, the money for your loan materializes into existence when you sign the note.

Brett:

OK. OK.

Alejandro:

Because this is what happens. There is such a thing called the secondary market is when let's say you, you sign a loan and you say, I promise to pay. I'm gonna pay for this. And you comply with the rules that look at you, everything is fine. You sign on the door line. And now this piece of paper is worth, let's say 200,000, which is the loan that you asked. Now, this piece of paper that says that you're going to prop that you're going to pay 200,000. It's not real money. It's just a commitment. It's a paid piece of paper that you said for so many years, I breadth an Alej Cita promised to pay back. So they take this piece of paper and they go, and they sell it in the international market, or they or they bundle it up with other pieces of paper and then they create a financial instrument and then they sell it to someone else. So someone else is buying your promise to pay. They're not really buying any money. They're paying a promise to pay. And then that's how you get more money. And that's how the mortgage business works. And this is when you get Fannie Mac, Fred Mac. And I don't want to go more into that if you don't want me to, but there is a whole universe sure. What happens after you sign on the dollar line.

Brett:

Sure. No, I mean, we can certainly dive into that just because again, I don't, I'm sure that most people don't even know about that side of the mortgage business. So, you know, there, you have the primary mortgages and then those are sold into the secondary mortgage market. Correct. Am I following that correctly? Yes. Okay. Yes. Okay. And then yeah, you had mentioned Freddy Mac and Fannie Mae, is

Alejandro:

That correct? FA Fannie Mae's the federal loan home loan corporation, I believe. Right. And then this is what happened. This is very interesting previous to the recession of 1929. If you wanted to buy a house, you would put in a large down payment, and then you go to a small loan for five to seven years, that loan was to payment, meaning that after five or seven years, the whole amount was due and you needed to take another loan. Okay. And you kept doing this until you eventually paid for your home. So at that time, you went sense. Think about that. At some point, you would not pay for your home.

Brett:

Right?

Alejandro:

When the 1929 recession came in and people's balloon loans, which was the regular normal loan at the time became due. Now they couldn't, they couldn't pay it. And a lot of people were into default and that created a whole have cuz you know? Sure. So the, and created this company called Fannie Mae, we call it today Fannie Mae, which came up with the unthinkable revolutionary and Orthodox and quite impossible idea of giving you a 15-year loan.

Brett:

Gotcha. People go

Alejandro:

Wow. 15-year loan. And it was so successful that they came with the even more impossible, unheard of, and practically revolutionary idea of giving your 30-year loan. And this is where the 30-year loans were born that did not exist before. And then you got another organization called Freddy Mac that came along, you know, that mimic the first one, they became another one called Geniah that mimic that then you became another one for, for the, for people that, that are in the army or in the Navy and so on. And that gave birth to the secondary market in the U.S.

Brett:

Okay. Okay. And is this might be a dumb question, but does the primary mortgage market completely depend on the secondary mortgage market? Like if there wasn't a secondary, yeah. Okay.

Alejandro:

Absolutely. You got it completely. Right. This is one of the reasons why in the U.S., we have such a dynamic mortgage market, which does not exist, for instance, I come from Chile. Okay. And in Chile when I was growing up and until very recently to my, I acknowledge that that doesn't exist. So if you go to a bank in another country or in Europe, the bank has to carry the paper.

Brett:

Gotcha.

Alejandro:

Here, the lender can turn around, sell it, and immediately have more money to do another loan. Okay. And by having such a liquid market, then houses sell faster. You know the real estate in us is very dynamic because of the creation of that secondary market.

Brett:

Yeah. Okay. Yeah. And that makes sense that that's where, you know, the finance side of being able to cover these loans. That's where that's.

Alejandro:

Yes.

Brett:

Interesting. OK. When did you said that you grew up in Chile? When did you move to the U.S.?

Alejandro:

I grew up in Chile. Then I lived in the UK in England for a few years, and then I moved to the U.S. in the late nineties.

Brett:

Okay. Okay. And what, you know, was the reasoning for the moves?

Alejandro:

It was wrong, it was, it was a mistake. It was wrong reasoning that turned out to be good. But

Alejandro:

At the time, at the time, my wife and I was married to another lady at the time, my wife and I assumed that it was gonna be easier. Okay. And boy was, I was wrong. I have never, I have never worked in my life so hard. That's when coming to the U.S. for two or three years, you know, I started absolutely from nothing for two or three years, I kid you not Monday through Sunday, I'm not an early person. So I would say from nine to like 11 o'clock at night nonstop, even during the weekends for three years. Wow. And I had, at that time, you know, I slept on the floor. I had an apartment, but I didn't have a penny to buy a bed. So I slept on the floor after one year of sleeping on the floor, I tell you, I started to like it. And then I thought that when my wife said, Hey, let's buy your bed. I, I looked at it. I said, at an unnecessary expense. So, you know, you can get used to almost anything.

Brett:

Yes, you can. Yeah. People are humans who have the unique capability to adapt quickly to a new environment.

Alejandro:

Yes.

Brett:

That's an amazing story though. As far as you know, where you've, I mean, just how hard you worked. I can't even imagine doing that, but look at you now mean that's very,

Alejandro:

But you know, as, as your other guest was saying on the podcast, that's what it takes to be successful.

Brett:

Sure. Yep.

Alejandro:

You know, there is no other way around. That's another thing that I learned that was a life lesson. I learned that yes, you can be successful. Yes. You can have access to, to the American dream, but you're gonna have to work for it. It's not gonna be given to you.

Brett:

Yeah. It's certainly not a handout by any means. Okay. so diving back into, or I guess circling back into the mortgage market and specifically to, you know, self-employed people this would pertain really well to real estate agents. So what types of loans are available to self-employed buyers right now?

Alejandro:

That's a very good question. We, we specialize on the self-employed independent, you know, lawyers and, and successful artists. That is a very tricky thing because technically speaking, when you apply for a loan, the mortgage broker is going to ask you for a little bit of info information and he has three days to actually approve you or deny you that works for like 90% of the loans. So 95% of the loans, but it doesn't work for the self-employed because usually in the case of the self-employed, the loan has to be created. You know, the loan is not there, to begin with. Okay. Self-employed people usually don't have, a big W2 payment. Usually, their tax situation is a little bit more complicated. Usually, they have money in places that are unusual and you have to put a pay catch together to see if the person qualifies or not qualifies, but to give you to make a long story short, the traditional way of qualifying for a mortgage is that you show your tax returns, you show your w twos, you show how much money you have in the bank.

Alejandro:

The mortgage broker runs your credit report and says yes or no, or says, yes, but this is what we can do. That's like 95% or, or more of the loans with the self-employed people. The first shop, we, the first shop, the client experiences. And I experienced it with them too, is that they're high producers. Let's say it's a, it's, he's a lawyer. He he's a successful attorney or he's a successful company owner. As a matter of fact, a couple of months ago, we did a loan for a company owner who makes millions of dollars, millions of dollars. He has a relationship with an amazing bank here in Los Angeles. I'm not gonna say any names. Sure. But he's had this relationship for 20 years. And the reason I'm bringing this story is because this story sort of exemplifies the difficulty that self-employed people or business owners or entrepreneurs have.

Alejandro:

So he goes to his bank for 20 years, millions of dollars. He, wants to simply get a loan for a couple of million, which seems like, a big amount. But in his case, it's not a big amount. Okay. His account executive at the bank, it's just no problem. You know, we will give you the loan. We'll give you this very low rate, your, our favorite customer. He goes, okay. And then they say, no. Why? Because there were a few things on his credit report. The bank did not like anything really bad. You know, I, I run it. I looked at it. This is a guy that has been 20 years. This is a guy where the bank knows exactly how much money he makes. Right. And where he spends it because he's been with them, they have access to his account and they say, no, and that is still, so he was in shock.

Alejandro:

He could not believe it. He came to me and like the first half-hour was just his disbelief. And I hear this all the time. Yeah. So what we do is the, in his case, he even had the tax returns to back up his level of income because a lot of self-employed people take a lot of deductions. So when they take those deductions, his income on the tax return appears to be very small and therefore they do not qualify. Okay. In addition to, to answer your question directly, and I, sorry that, that I took that attention. No, no, no. That's okay. To answer your question. In addition to the traditional tax return method, we use like seven additional methods to qualify a person for a loan. One of those methods is to look at his bank statements, to look at the income. So we look at all of the deposits and we see how much is his income.

Alejandro:

Another method is to have his accountant prepare profit and loss of the business. And we would use the profit and loss to qualify him. Another method is that if the person has a lot of money already in assets or in his account, we can qualify them that way. About a year ago, a little bit less than a year ago, that was this very successful artist. He, he, he does rap music, you know, and other things he, he wanted to buy a high end townhouse for about 1.4 million. He had like three times to that amount in his account already there. Yeah. He could not, he could not qualify. Can you imagine that?

Brett:

I think, yeah. If I was on their end, I'd be very frustrated.

Alejandro:

Yeah. Very frustrated because remember lenders lend on your stream of income. So even if you have a pile of money on the side, but you cannot show stream of income, then you are not in their work in their universe, you know, you're not credit worthy.

Brett:

Sure.

Alejandro:

Okay. And I tell you a little, very quickly, another little story. I remember many years ago, I went to another big bank. Not even for me, for my mom, you know, she wanted to increase her credit card limit. We were talking to the account executive and he started to brag about his credit score, how good he was. And we just listen, you know, and day he said, and you know what I have, I am 50,000. I have credit for $50,000. And my credit card balance was $50,000. This is years ago. So I figured this person probably doesn't make $50,000 a year and have $50,000 in net. Right. But he's considered, he's considered credit. And he, he has a high credit score compare that why? Because he fits in, in the boxes.

Brett:

Gotcha.

Alejandro:

Compare that to the entrepreneur that makes millions of dollars, but cannot qualify for a $50,000 line of credit. You see, you see the, you see the yes. Yeah. And, and for years, and years, years, and racked my brain to understand why the system was like that until I, I finally understood it in the old days, the days that I was growing up, you used to go to a bank. You used to go, you used to talk to a fellow that fellow knew everything about you. This is what happened to me. He knew how much money you made, where you worked. He knew your family. So, and it happened to me. You could go and say, you know, and really short this month, can you gimme a loan for black? And he would like go into his computer and look at your account and say, yeah, we'll give you the loan. And that was it. But that was time consuming and costly for the lenders.

Alejandro:

That is what is called relationship banking. And even though many lenders advertise that they do relationship banking. That is really not true. You have to have have 10 million or more of income in order to have access to true relationship banking. So what the banks did is they created an automatic system where they didn't have to think they didn't have to hire a guy to know about you or to spend the time with you. And everything could be done automatically to them is, was very successful. They were able to serve 95% of the population. You can now to go to a website with a few variables, boom, you get credit. You can go, you can even call a lender or visit a branch. If you work, if you are as salaried employee, and you can say, you know, I wanna buy a house. And if you feed the boxes, what used to take weeks can take, you know, just a day or two boom, you're approved. So it works for 95% of the population, but the other 5%, which is highly productive, which really is driving our economy and our businesses. Yep. That system for them is brutal and it doesn't work.

Brett:

Okay.

Alejandro:

But from a lender's perspective, it doesn't matter because they get to serve 95%. So if 5% falls through the cracks Hmm. They don't care that much.

Brett:

Yeah. They're willing to take that loss.

Alejandro:

Yes.

Brett:

So,

Alejandro:

So to answer, to answer your question is long-winded explanation is that's totally fine. That that is the niche that we cater. That is the niche. We go after that 5%, we really listen to them. And we really craft the loan program. We looked at those seven methods that I was, that I was referring to and we find the one, and then we massage it because even though there are seven methods, they also a bit boxy, you know, you have to follow certain rules. Sure. Most people don't, don't really fit into it. Exactly. So we have to massage it.

Brett:

Okay. I see. I see. Okay. Well, that's great that you guys are able to help that 5% that, you know, obviously everybody deserves to have access to that and have that sort of relationship. But it's sad to hear that, you know, unfortunately, you know, that 5% does fall through the cracks pretty often, but yes, it's good to have people like yourself that can help them.

Alejandro:

Yes. And that, that basically I do that because many, many years ago in the nineties, when I came to the us, I didn't have any credit. I didn't have anything. I wanted to buy a van, you know, cause I was working, you know, Actually great. And I couldn't buy a van And then that led me and I was able to show to the dealership that I made the money to for the down payment and for the, the payment, which I could really afford. However, I did not fit into the world since then I went, how is this possible? And

Brett:

Right. Well, that's what really got you kind of curious and ticking into, I need to solve the, you know, why that happened to me and, you know, help others kind of avoid that whole situation.

Alejandro:

Yes. And one thing that your, one of your other guests, I listened to another podcast, I think it was from Mrs. Oliver is, but maybe I've been someone else. And I think he's still, already right. Most of the information I know is because I failed at it first.

Brett:

Yes. Yep, yep.

Alejandro:

I had to pay the failure price in order to get to really, really, really know it. Yes, I did courses and yes, I, I took exams and, and so on, but in addition to that, you really have to go out there. If you are like a brand new real estate agent or broker or mortgage broker, there is no way that you cannot avoid failure. And then my recommendation, like your other guests have always said, embrace it. Right. Because that's the only way that you're going to, it's not a question that if you're going to fail, you are going to fail. It's your attitude after you fail that counts.

Brett:

Right. Yeah. And I think that that's always a key takeaway that I have from, you know, interviewing our amazing list of guests that everyone almost says the same thing of you're gonna fail at some point you might as well almost get comfortable with that failure, but most importantly learn and, you know, change following that failure so that you don't have that same thing happen again.

Alejandro:

Correct?

Brett:

Yeah. Well, I mean, that's great advice and I'm glad that you had brought that up and kind of reinforce that for our liscenters. So my next question is, you know, for agents that have a buyer who has a good income but they have a low credit score, what would your advice be for them? And like how to kind of, I guess they can't technically give them financial advice, but you know, if they had any sort of tips and tricks for them to better navigate those waters, what would your advice be?

Alejandro:

This is my advice. My advice is, first of all, don't go and pay thousands of dollars to a credit repair specialist. Because really like I did this last night, last night before the interview, I was talking to a successful lawyer. He to buy, he wants a really expensive loan for expensive loans. You need usually the, the minimum credit score for a loan is six 20, but in his case he needed six 80 or more simply because when you get into the millions, those loans become so expensive. If you don't have six 80 or more. Okay. So I spent $64, $64, and his case was complicated into a set of tools that are available, not just to me, to anyone that can run a credit report okay. To find out what he needed to do in order to increase his score.

Brett:

Okay.

Alejandro:

I know people that charge $4,000 for not even giving them that kind of advice. So my first advice to the agencies, if your client is going to don't, don't allow your client or, or don't allow, I'm saying, don't recommend that your client goes and pays thousands and thousands of dollars because at most with a hundred bucks, you can figure out what he needs to do.

Brett:

Okay. Okay. And from, I guess what's usually example from last night obviously you don't have to give details names or anything like that, but after you had ran that report, what was the general advice of how to up the credit score

Alejandro:

In his case, he needed to pay down some of the, some of the loans that he had. Okay. But because he's successful, he can, right. He needed to do that. And then he needed to call one of the credit card companies. Apparently that was a mistake. And one of his loans was reported late once. Okay. So he explained to me that he had already called me in the past and they had, it was a genuine mistake, but they did not remove it from the report. So said, call them again and ask them if they would remove the mistake from the report. Just those two things change are going to change his picture dramatically.

Brett:

OK. And would you say from your experience when you've had other cases like that, is there kind of one or two factors that usually come up to increase someone's credit score or is it pretty varied across the board?

Alejandro:

It's varied across the board, but I will tell you this, there is no loan that you cannot eventually make if you put the time and the effort. Okay. Even if, even if the credit score is completely trashed right there, a gentleman and then I can say his name because I want him to get as much business as possible. His name is Philip Philip Tyran.

Brett:

Okay.

Alejandro:

Philip Tyran. You can go into the internet, you can go to his web website. And by the way, I'm not getting anything. He doesn't even know that I'm talking about him. I don't get a single penny from him. So, you know, this is just a annual endorsement because he's so good. Okay. There are many systems you can go into the internet and you can buy. But the one that is cheapest, and that was the one that really works is by Philip Tyran. His site, I think is seven 20 credit score.com. Okay. He was a loan officer in the, in the two thousands. And he noticed the same thing that I'm telling you. He noticed that there were very good clients, that the credit report needed a little tweak here and there. Okay. In order to get the loan that they needed. And he made it his business to find out what those tweaks were.

Alejandro:

Sure. And then he created a course that sometimes you can buy on eBay, it's called 7 27 steps to seven 20. And if you're lucky to go to eBay and see this, a collection of six CDs, if you're lucky to get it, buy it and study, this is the best resource that have ever come across. Okay. And all of this, just to tell you that as your other guest was mentioning on your podcast, the universe will bend to give you what you will want. If you put the effort. And if you put the time that you require, so let's say you're an entrepreneur. Let's say you're a business owner. Let's say you want to buy, I don't know, a commercial property or a house for yourself and your wife. And let's say your credit is shot shot. It's not even 500 still within a year or two. If you listen to that course and you do a few and change a few things in your life, you'll have the score to qualify for a good loan.

Brett:

Okay. That's

Alejandro:

So my point of view, my point of view is that it's not that the person doesn't qualify it's that maybe it doesn't qualify now In one month, 60 days or maybe a year, you will qualify.

Brett:

Okay. Okay. Well, that's good to know. Certainly something that agents out there can help reassure buyers that are concerned about their low credit scores that, you know, it's not something that's gonna stick with you for life. If you make the right changes to, you know, increase it.

Alejandro:

Correct. And as an agent, I would say, don't take it personal. You know you can see when the, when the client wants to work with you, right? Most clients, I would say 90% of the clients want to work with you. I will follow your advice. You just have to be open to that little 10% that are gonna make your life miserable. It's better to like pull life politely decline to work with them. Same with the loans. Huh? Sure. It's better politely to decline to work with them rather than to make your life miserable and because they're gonna fight against themselves. So even though you're trying to help them, you're trying to provide the tools they're sabotaging themselves. And, and by that token, they're sabotaging you.

Brett:

Right. Right. Yeah. That, that the tend to impact you and your business. And it just kind of is the, that unnecessary and unwanted stress that you just don't need.

Alejandro:

Correct.

Brett:

Okay. So for those that are trying to, you know, find a mortgage broker or someone to provide them a loan how should, how should someone, you know, approach that so that they can find, you know, a good mortgage broker and, and kind of avoid, you know, the bad ones. What should they look for?

Alejandro:

I, I will answer your question, but I would face it by saying that I don't believe that there are bad mortgage brokers. I believe that there are mortgage brokers that don't wanna put the time into.

Brett:

Okay. Okay.

Alejandro:

Cause if you put the time into it to really listen, and if you put the time into really finding out what is going on, you can make the loan maybe, maybe not right now, but in 30 days in 60 days, you can. So I would say, you know, this is this sales counterintuitive, but mortgages and real estate is not a numbers game in the same is that it's not the numbers that matter. It's not, well, this guy said that you could gimme a 4%, if you can gimme 3.8, you know, I'll take your loan, even though the law and the press and everything you read on the internet makes it that way. It's not really that way. So people's business. Okay. So my advice would be talk to at least three mortgage brokers or more. Okay. And see if there is connection. Sure. See if the person willing to spend the time, because really to do a self-employed or entrepreneurial artist loan, the, the, the mortgage broker is gonna have to listen maybe a couple of hours, maybe more

Brett:

Right

Alejandro:

To your story. See who is willing to do that? Who has like good communication, who is not speaking to you in, in acronyms that you cannot understand they're flaunting all these, you know, I don't wanna say them, but they are lending is full of acronyms. Some, no many of them, I don't understand them myself. I have to go to the internet. What did she say? Talk to, you know, somebody who has the patience to listen to you, who doesn't bombard you with acronyms and is willing to help. That is the guy that you wanna go with. Not the guy that is gonna give you 0.0, zero 1% less, or right. In my opinion, in my humble opinion.

Brett:

Sure. Well, and that makes sense. You want someone who like you had just said is gonna take the time to work with you. You understand what your needs are, and you're not just kind of playing the number game where if you went with someone who's not gonna spend that time, you really are just another number you know, in their system.

Alejandro:

Correct. Then I'm gonna give you one more, tip another tip. Sure. If go for it, if it's okay. If, if we have the time to do it,

Brett:

Oh, we got plenty of time. Don't worry. Oh,

Alejandro:

Okay. If you are part of the 95%, meaning you have a stable job, you had it for two years, you make good money. Your credit score is six area or more. You have money saved in the bank, Go to rocket mortgage, rocket pro. Okay. They're the cheapest. Okay. They, they're not gonna, they're not gonna put as much time into you sure. But maybe you don't need that.

Brett:

Right. Right.

Alejandro:

And then you can rest assure that that's the cheapest loan that you can possibly get.

Brett:

Okay. That's good advice. And I'm yeah.

Alejandro:

And I don't get anything from them either. So, you know, I, I, I'm in the full in for full disclosure. I'm approved with them. I can make loans through them about by endorsing them. I don't get anything. They don't even know I'm doing this.

Brett:

Okay. I'll make sure I'll have that in the show notes. Alejandro does not get paid, yes, by Rocket mortgage.

Speaker 3:

Okay.

Brett:

So we've talked about, you know, your kind of, what your views are about different as aspects of the mortgage market mortgage education. You've enlightened us, I think, on a lot of those aspects. Can you tell us more about, you know, your actual business and what you do for people?

Alejandro:

Yes. We specialize on that 5%. We specialize on the self-employed on the entrepreneur and on the successful artist we specialize. I can tell you that pretty much every week, my conversation with new prospects begins like this begins Alejandro, thank you for taking my call. I don't want you to waste your time. I have already been declined. The mortgage brokers that already, I can only qualify for a hundred thousand. And in, in, in, in, in, in south, in California where we are located a hundred thousand, you know, you can't buy anything. Right.

Alejandro:

So I don't know if it's worth it for you. And I said, you know, just tell me. And I, and I just say nothing for like half an hour. And as they talk to me, I go, but this person qualifies, but what about this? What about that? By the time they're done, I go, you know, send me this. They is. And this, I mean, my approach is, is minimalist. I always ask always when I listen to the person, I believe everything they say at face value. I don't okay. If they say that they make a million dollars, I believe it. If they say they make whatever, I believe it. And then I only ask for two or three things just to confirm my own mental theory that I'm building as I'm listening to them, to see if they qualify. Sure. They send me those two or three things and I go, you know what you qualify. This is what we can do. Okay. But to answer your question, I deal not by design with people that have been rejected, I deal with also very successful people. Like the, the business owner that I was telling you has millions of dollars that he thought he had relationship in banking. And he found the hard way. He didn't, that is my public.

Brett:

Okay.

Alejandro:

That want to buy a house, a residential home, or maybe a business property that they wanna rent out, or maybe they want to a refinancing for business reasons. A lot of people that are entrepreneurs use their home as a, as a bank. Right. And they, they, they, they do refinances refinancing on a strategic way to pull money and use it on their business.

Brett:

Okay. Okay. And what is the name of your company?

Alejandro:

It's called prosperity lending and our website is prosperity.lending.us. Okay. We are also writing a book and if you wanna receive a free chapter of the book, or if you would like to get a copy of it, just, just put your email address at prosperity lending, do us forward slash book, and then you can put your email address on.

Brett:

Awesome. Okay. Well, I'm glad that you brought that up, cuz that actually was going to be my next question. I was gonna say, you know, beyond your career in mortgage, you are also an author. And if you don't mind, I'll, I'll say the title of the book just to give you a quick little plug for it. But the title of the book is money. What is it, how it works, how you can create wealth and prosperity for yourself and your community. Can you tell us a little bit about the book if, you know, if you don't, if you don't wanna get too deep into it that I totally understand.

Alejandro:

Actually the reverse that is a very passionate subject to me. So you're gonna have to stop me. Oh,

Brett:

Okay. Well we can just use that as a little teaser.

Alejandro:

Yeah, yeah. You know, but I'll tell you very quickly this, I was always fascinated by money, unfortunately for me, not for the acquisition of money, but what really it is, you know, I was born in Chi, Chile, went through an upheaval in the seventies, right where the money basically lost all its value and then it regained its value. And that always shocked me. And I thought, why is this, you know, what's behind this thing called money. And I've made it my past time, my hope for the last 40 years to read as much as I can to find out as much as I can, where this money come from. Like what I was telling you, now that you signed this piece of paper and all of a sudden this piece of paper is worth 200,000 or whatever. The amount of the mortgage is. Right? Isn't that fascinating? Yes. That money doesn't exist. That money was created out of thin by you, a good guy, just signing. I will pay this amount of money in. So and so and so many years,

Brett:

Right?

Alejandro:

So what the book is this, usually when you buy a book about money is some guy that is successful that is telling you a system of how to make it that's like most out there or, or they have these academic books that they're hardly, you can hardly read them or understand anything. You know, I had one of those books and I sent it to my wife. My wife says, can I read? This says, of course she couldn't get past the first page. And she says, what is this? What is this? What is this? And I, and to me seems simple, but I said, you know what? This book was written by an academic. So you have the academic books or you have the, I'm gonna call them quick, rich. Although they're not all like that quick, rich get, get quick rich books. Yeah. But there is nothing that tells you what the thing is.

Alejandro:

And now in the times that we're living, we're living very terrible times where, where like, like in Canada, as you know, you know, if you have money in the bank just by your me, suspicion that you did something wrong, even if you didn't do anything right. Boom, your money vanishes. So I was very excited when I saw that this problem people through the, the thousands and thousands of years that civilizations have been in existence have found solutions to this. And there are towns in England and in other places, and with this I'm finishing that have created their own money and they're completely independent. So all of these things prompted me to say, you know what, nobody's reading a book to say what really money is without necessarily because he wants to sell them or not necessarily because he's promoting a quick rich scheme. You know, this is the book. This is the book that I would've liked to read.

Brett:

Right

Alejandro:

Before.

Brett:

Yeah. Well, I mean, and that's a great motivating factor is to, you've read so much literature about money, trying to get a better grasp of it in the whole time. You're thinking, why is there not a book in this style that I think would be more helpful? And then you just went up and did it and you wrote it.

Alejandro:

Yeah. And, and one more thing is I'm using my wife to proofread it. She's like proofreading and everything, because if she can understand it, you know, when, when you are into this for so many years, you forget, right. You take a few things granted, so you lose, you lose the perspective. Right. So that's why I'm having her actually write some of the passages and read it to make sure that if she can understand it, everyone will be able to

Brett:

Well, yeah. And I think that that's a, a good idea cuz when you write it from the perspective of an expert like yourself, there might be, you know, just industry jargon or the acronym acronyms that you had mentioned earlier that can kind of trip people up and confuse them. If they're coming from, you know, an outside perspective that has never really delved into that topic before.

Alejandro:

Correct.

Brett:

So I've gotta ask in when he brought up money, that could have been a whole different wormhole that we go down in this episode, but I won't go there. But when we talk about mortgage and especially in 2022, that's kind of a hot topic as far as it comes to the rates. What is your prediction for 20, 22, as far as, as you know, mortgage rates go and what sort of impact that'll have,

Alejandro:

I'll tell you. And then let me make a disclaimer that again, I'm not receiving any compensation of any soever. I just want to give information to the audience. There is a hedge fund manager by the name of Martin Armstrong. I came to know him because one day I was bored. I was going through net. I couldn't find anything. And there was, this was this documentary called the forecaster. Again, I don't get anything from him, no relationship whatsoever. I saw the movie. I could not believe what this guy did. So to make a long story short, I'm subscribing to his blog and his website. So this is what he says, this is not me. This is from him. And, and I agree with him. The, even though we are in a very volatile economy, even though the whole world, Europe is in a very volatile space. And even though we are doing really badly compared to the rest of the world, we're doing great,

Brett:

Right.

Alejandro:

Even though the us dollar is weaker now, the what it was before compared to Europe, compared to Asia, except China maybe, and compared to south America, we're doing great. So we in the United States and we, with the us dollar, we are the store of value for the world. So as the other countries, you know, like nowadays a war in Ukraine and so on. So what people do in a country like Ukraine that have money, they try to fly to a safe Haven, right? And even though there is a lot of discussion, the safe Haven still is the us dollar. And it still is the us right now. And usually a lot of people that know a lot more than me about the economy. They never really look outside of our borders. They only look within sure.

Alejandro:

In this case, you have to look outside of the, our borders to understand why rates continue to be cheap. Why the stock market continues to go up. And again, I'm not an economist. I'm not trying to become an economist. I'm not saying that I am an economist. I'm just trying to give some information to my fellow REALTORS® and mortgage brokers to under understand why we have the rates that we have, right? So we have this flow of money coming from abroad. Where can this money go? Some people say, well, you should invest in gold. You should invest in silver. And that's also okay for an individual. But think about this is a little bit, even it took me a while to understand this when you are in charge of billions and, and billions of dollars, and that is your responsibility, you cannot buy gold or silver. You have to have warehouse after warehouse to have the warehouse full of the stuff. So what these people do, what these international investors do, there is now a flight of capital into the us. They, they only have two, two areas where they can put it. They can put it into stocks or the best next thing is residential mortgages. Yes. Residential mortgages. They're only gonna make 3%, but 3% versus losing or versus negative rights like in Europe. That sounds pretty good,

Brett:

Right? Yeah.

Alejandro:

They can buy stock. You say well, but the stocks are overvalued. They are overvalued. But if you buy a share of apple for 5,000 and then you can sell it again for 5,000, even if you didn't make anything and you have billions and billions and billions and billions and billions, this sounds pretty good because what are your alternatives? You leave it in your country. There may be a war. You leave it in your bank account. It could be ceased. You leave it in another place in, in government, in European debt that is paying negative. So what are you gonna do? So that's why we, and for many years to come according to this economist, again, I'm not an economist and not pretending to be one for years to come. We have this ocean of money coming to us from all over the world because we are comparatively good or sure in better shape. And that's why mortgages continue to be cheap. And even though rates are rising, you know, I can tell you that I'm doing loans today. That about a 1%, one and a half percent higher than they were in November. Last year when I started in this business, I remember my first loan was to a young woman. I quoted her 7%. I, I found one at six and a half and I was jumping for joy. It was the deal of the lifetime six and a half percent back in 2006.

Brett:

Right?

Alejandro:

So even though today you may pay 4% or, and a half let's say for a regular mortgage or 5% or even 6% for this big, huge jumbo, you know, mortgages, comparatively speaking, that is like super cheap.

Brett:

Right, right. Yeah. When I think, sorry, go ahead. So

Alejandro:

I don't know to answer your question.

Brett:

No. Yeah. I mean, I think that, and that's what trying to predict, you know, what's gonna happen with mortgage rates over the next year. It's not gonna be 100% accurate, obviously. I think you know that it's going to go up. You just you're. No, one's a hundred percent sure how much they will go up. Correct. but Go ahead. Sorry.

Alejandro:

Sorry. Sorry. I don't interrupt you. This is your no,

Brett:

No, no, no. You're the guest. This is all about you. This I'm just the host. Thank

Alejandro:

Thinking. So one more thing that again, if that time Fromm from Martin Armstrong and he has a blog every night for free, so, okay.

Alejandro:

Since most governments on earth have borrowed so much every time I would reach go just a little, I'm talking about fractions of percent. They in our government, they owe so many more billions more in interest. So you have this battle. Now this battle between external governments pleading with the fed, not to raise the rates because just a little bit, and they're bankrupt, they're already bankrupt that it's even worse. So you have people, foreigners, foreigners dealing, pleading with the federal reserve to not, you know, you know, put the rates up, right. And then you have this ocean of money coming from abroad, wanting a return, whatever return, because they cannot get a return anywhere. Right.

Brett:

Right.

Alejandro:

So you have these two forces that are sort of battling each other at the moment, which one is gonna win to what degree, like you said, nobody can predict it. I can tell you that. I foresee that race will continue to go up a little bit, but this is like a chicken. And the, the more they go up, the more this ocean of money will come in because the better it becomes, you know, nowhere in the world, you can get a three or 4% return if you have billions and billions and billions and billions of dollars, except if you get a risky investment gotcha. Assure fire mortgage back security, which is as sure as you can get, if these things keep going up in, in money, more money comes in. If more money comes in that puts the pressure going down.

Brett:

Right. Right. Yeah. And it'll be interesting. I'm glad that you touched on the federal rates. It'll be interesting where those go. Obviously they, they have to go up as well, but again, you never know exactly how much they will those

Alejandro:

Correct.

Brett:

So one last question that we ask every guest, and I'm sure that you heard this on the episode that you listen to

Alejandro:

Was prepared for it. I was prepared for it.

Brett:

If you could go back in your career and change thing, what would it be and why

Alejandro:

I would change that back in 2007, I abandoned for a few years, the mortgage industry, and I concentrated on commercial real estate. Okay. Because even though I found my mentor, that's another thing that, that your other guests mentioned. And I think it's very important. Have a mentor. I a mentor for 10 years, and I learned invaluable lessons, but you know, real estate is so big. You have capital racing for projects, you have commercial real estate, you have residential real estate. You can do loans. You can do commercial, residential, you have all these areas, big year niche, whatever that niche is. And my niche for me was lending lending to me naturally. I don't, don't really have to think much. I listen to a person on the phone. They tell me all their problems are why they didn't qualify. And immediately the solution comes to me.

Alejandro:

That's not because I'm a genius. It's not because I'm clever. It's just because it's a feel that comes naturally to me. So what I would've changed is when I started in mortgages in 2006, I should have, have remained there and not taking a detour into, into, into Realty right now that I did it. It's great because when I'm in a purchase transaction, since I'm a realtor myself, I never cease to be a realtor. Although I'm a non practicing realtor when I'm in a purchase transaction, I know, I know what is going on. I know about disclosures. I know timeframes contr how to read a real estate contract, you know, and things like that. But that's what I would've changed. I would've, I should have continued in the mortgage industry and not taking a detour somewhere else.

Brett:

Okay. Well, yeah. And I think the that's good advice for anyone. I'm glad that you had brought into that piece, just, you know, nicheing down and finding, you know, what comes naturally to you. What do you think plays into your strengths the best and focusing on that? Cause a lot of guests in the past have said the same thing, how finding your niche is really important to finding success.

Alejandro:

Yes. And one more thing if I may, is that in, in, in in California if you have a real estate license, the department of real estate allows you to do loans too. Okay. So if you've never dealt in this area and you are still trying to find your niche get the real estate endorsement, you, you have to do 20 hours of, of, of education. You can get the real estate endorsement and then you can try to do one or two loans and see how it goes. And maybe that could be your niche too. Right? The California department, real estate allows you to do that. So why not?

Brett:

Right? Yeah. Give it a shot and see what happens.

Alejandro:

Yeah.

Brett:

So one last thing before we sign off if people want to, you know, learn more about, you learn more about your company connect with you, what is the best way for listeners to do that?

Alejandro:

The best way to send me an email at Alejandro at prosperity lending do us. Or if you go to my website, which is parity, www dot prosperity, lending us and send me an email that, that is the best way. I'm very open with the information. You know, that this is something that I learned a long time ago and I tried to like your other, I, I I'm referring to your other podcast guest, Mrs. Oliver is because she hits so many correct points, successful people love to share,

Brett:

Right.

Alejandro:

And this is, you may wanna call if you, this is, I learned many years ago when I was trying to call executives at companies, I was always stopped by the secretary, by the janitor, by everyone. But once I got to talk to the company owner, he was like super nice. Right. And I an open book, and this is what I've always tried to emulate to go, to go to www dot prosperity, lending us, send me an email and I will be happy to, to help you answer your questions. And so on, maybe we could, maybe we could even work together, you know, on the loan.

Brett:

Wonderful. That's awesome. And then can you just give the URL for the book for people to be able to pre-order that if they'd like to

Alejandro:

Yes. It's the same address, www.prosperitylending.us/book

Brett:

Okay, perfect. I just wanted to make sure we got that in there again, I'll have in the show notes so people can click on the link, but I just wanted to make sure that you know, people have that information if they're interested in going and checking that out.

Alejandro:

Okay.

Brett:

Okay. Well, thank you so much Alejandro for again, taking the time and talking me. I learned a lot. I think our listeners will learn a lot as well. And for those that want to connect with Alejandro you know where to find him, and he's an open book, just a wealth of knowledge.

Alejandro:

Thank you, Brett. It was a pleasure to meet you,

Brett:

You as well. And,

Alejandro:

And, and thanks for the opportunity to be on your show.

Brett:

Of course. Thank, thank you for coming on. We really appreciate it.

Brett: That’s it for this episode, thanks for listening! If you enjoyed the podcast, you can subscribe to us and leave a review on your podcast player of choice. Shop Talk is a production of The CE Shop.