Money Merge Accounts: Why Does This Program Seem to be Everywhere?

by Florida's #1 Mortgage Planner on May 1, 2008

Mortgage Acceleration Programs are a ripoff The Money Merge Account, a product of United First Financial, is becoming more and more popular these days, with even so-called “gurus” in the industry starting to back them up.   What you need to know is why.

The Money Merge Account (MMA) has been around for several years, but seems to have grown legs in the last year.  There are several reasons for this, just look at what the industry has been going through during this same time frame.  Then look at how the program sales force is developed, network marketing.  Multi-level marketing (MLM) is not the a good way to “sell” this type of product, especially due to its lack of true value.

Now, since mortgage brokers, real estate agents, and even the “gurus” are now making considerably less than they used to, you can see why this program is now marketed heavily.  Due to the Money Merge Account’s widespread publicity, other programs are being developed, such as CMG’s Home Ownership Accelerator and  the latest addition, the Home Equity Acceleration Plan (H.E.A.P.) by Roccy DeFrancesco.  I do not recommend any of them, plain and simple.

Why?  You don’t need a program in reality.  You certainly do not need pricey software that doesn’t have any “true” value besides a means to discipline yourself.  Sophisticated algorithms really do not provide enough benefit to justify its price tag, but then again, the salespeople will argue this because they get paid (handsomely) for each one sold.

Another reason I do not recommend them is that other options are much better.  The rules of money work against these programs, and they may actually be robbing you of your financial future.  Look at what the banks do (arbitrage) along with what the wealthy do, and you will se what I mean. 

One of the other problems with these programs is those who are marketing it.  It has been shown that desperate people will say whatever it takes to get the sale, all the while presenting misleading information, even outright lies.  Their lack of financial understanding shows throughout.  They will downplay tax advantages, build up the negative connotations of amortization tables, and play up the need for “software” to make it work.

All of these programs require the use of a HELOC (sometimes called an ALOC or something else), typically used as your checking account.  Since lenders are freezing these types of programs or severely limiting them, so these programs are in jeopardy, especially in declining markets like South Florida.  That doesn’t stop the salespeople though, as they will suggest opening personal lines of credit or even using credit cards to get around that hurdle. 

The bottom line is be cautious and do your own research before choosing one of these programs.  Understand all of your options before you commit and learn how to do it yourself, instead of paying someone else to tell you or get you sold into expensive software.  In simpler words, don’t drink the Kool-Aid.

{ 27 comments… read them below or add one }

aly May 5, 2008 at 6:16 pm

you should warn people aboutt his on ripoffreport.com. people are getting taken every day on mortgages and aree so blind to stuff like this, that it would be good to share with them on ripoff report where they often go to read about scams and ripoffs.

Early Mortgage Payoff May 9, 2008 at 3:03 pm

it must be working if its appearing everywhere! but i will say its not for everyone… :/
-Ron

Robert D. Ashby May 28, 2008 at 9:48 pm

Ron,

Just because it is everywhere does not mean it is working, nor is it the best thing for anyone. I see desperation in the industry and people clinging to anything they can make money on.

Mortgage acceleration does work, don’t get me wrong, but two things can be said about it. One, you don’t need expensive software to make it work. Two, it is not the best way to be in a position to have your mortgage paid off.

Chris June 19, 2008 at 8:37 pm

So what is the best way then? Most people can barely balance a check book…how will they have the knowledge to invest without losing their skin?

How will you educate the millions of people who have a mortgage out there?

Chris

Robert D. Ashby June 20, 2008 at 2:36 pm

Chris,

Thebest way depends on each individual or family as there is a lot that goes into it. The fact that many cannot balance a checkbook is irrelevant to fact. A willingness to learn is all that is needed to fix that. Investing knowledge is all over the internet, though not all is applicable to each person.

As far as my education, this blog is part of my reaching out to find those interested in learning. Beyond this site, I have several books in various stages of writing, the first to be completed by August. I already have one booklet out, titled the Truth About Mortgages, which I will be updating soon to include mortgage acceleration facts.

There is risk in everything we do, including paying off your mortgage. One does not need to look beyond the midwest to see home equity is not a safe investment after all. Of course, there are many other disasters thatcan wipe out your home’s equity in an instant. People need to realize that fact, which hardly anyone mentions anywhere.

Thank you for adding to the discussion.

Chris June 20, 2008 at 11:29 pm

So what would be the perfect scenario to you for what someone should do with their mortgage? And what percentage of the population do you think could be successful with that in a short amount of time?

Robert D. Ashby June 21, 2008 at 10:18 am

Chris,

I do not like to give out “specifics” for a “general” audience. If you would like specifics about your situation, feel free to contact me.

Nothing is perfect, so I do not plan that way, a balanced viewpoint is needed. As far as what one does with their mortgage, in general it is better to wait to pay it off and invest now, focusing on an overall financial plan versus just getting out of debt.

Percentage of population that could be successful within a short period of time is very subjective as success and timeframe are varying depending on each family. I have done comparisons of conservative startegies versus mortgage acceleration programs in the past, so check out this post for more information on that. The bottom line is by not focusing on paying off your mortgage, you can be in a lot better financial shape quickly and over time.

Robert D. Ashby June 21, 2008 at 10:24 am

Sorry, I forget to approach with a general percentage of the population I feel can benefit from proper mortgage planning. The Federal Reserve believes it to be around 67% according to their own report, I think that the numbers are higher as they only talked about those families that would do better by seperating equity and investing instead.

Dick July 22, 2008 at 12:49 pm

Robert,
You insinuate that separating equity from your home and investing is in general the best strategy for a large percentage of homeowners. It would be appropriate to include “in my opinion” to your statements. You are stating your opinion as if it were a fact which is inappropriate. As I understand the idea of “equity harvesting” the goal is to be safe with your investment. Investment by definition includes speculation, or in other words risk. If someone has a mortgage with a 6% rate and they pay the balance down early, every dollar that they reduce the balance on the loan is a dollar that they will no longer pay 6% interest on which is the same thing as a guaranteed 6% rate of return on a dollar “invested”. Where are the 6% guaranteed investments in this market? I also know that I have not taken into account the “tax deduction” on the mortgage interest. To get that deduction, if you are in a 30% tax bracket you spend a dollar to save 30 cents in tax right? Also in middle America where the typical mortgage is more like $150,000 in stead of $450,000 the tax deduction for the interest is many times just not real because of the standard deduction. So, we can agree that there is no one size fits all scenario right? With that being said how in the world can you tell someone who wants to pay off the mortgage and live what used to be the American dream to own the home free and clear and have the mortgage burning party that it is not a good thing to do? Let’s face it we have a huge debt problem in our country. Any steps we can take to reduce that debt are positive. Compound interest is one of the most powerful forces in existence. We need to make sure we are on the right end of it.

Robert D. Ashby July 23, 2008 at 4:19 pm

Dick,

Thank you for joining the discussion. While you make some valid points, you are a missing a few things. I do agree that there is no “one size fits all strategy”, which I have said consistantly since I started blogging back in 2006. I also agree that Americans have a debt problem and that compounding interest is our best weapon, but I disagree with how you use it.

Fact is fact, not opinion and numbers do not lie. As for a “large percentage of homeowners”, even the Federal Reserve (Chicago) agrees with me, having a report showing two thirds of Americans would be better off through strategies I, and countless others, employ.

Paying off your mortgage does not guarantee a rate of return like an investment. Sure, it reduces the cost of the loan, even places you in a position to pay off the loan at the same time as an investment with the same rate of return. However, paying off your mortgage reduces liquidity. Also, everything has risk, whether an investment or paying off your mortgage. Just look at what happens after a disaster and you can tons of “equity” being wiped out that insurance cannot even replace.

There are investments that guarantee rates of return and then there are others that stand the test of time, meaning long term rates of return balance out, after rises and dips. Bonds tend to run an average of 8% ROR over time and the S&P over 10%. Those are just the basics.

Real estate investing, currency investing, and a multitude of other options exist out there, many considered “safe” investments. Paying off your mortgage also fails to allow the ability to seize opportunities as your money gets locked up in your home.

I see you are also caught up in the tax deduction myth. You should read this post…Would You Rather Spend $6 to Save $4 or Spend $4 to Earn $6?. This post addresses the incorrect mindset brought on by focusing on the cost of the mortgage as you believe.

The fact is that most people can deduct far more than just their mortgage, but the mortgage accomodates the ability to exceed the standard deduction. With a $150,000 mortgage at 6%, that is already $9,000 in tax deductions, so chances are they can actually exceed the standard deduction with child care costs and more added in.

As for paying off one’s mortgage, if they want to, I recommend they do. I WILL NOT RECOMMEND wasting their hard earned money with a Money Merge Account as every cost-benefit analysis I have run shows this program is not worth the money. Add to that the fact that we will be seeing increases in taxes, which will make “arbitrage” even easier, and you can see why around 80% of the wealthy refuse to pay off their mortgage even though they can with the stroke of a pen. How can I say that? Easy, the numbers and most of the wealthy agree with me.

Chris July 23, 2008 at 5:29 pm

Hey Robert,

So are you a follower of Doug Andrews and what he teaches? Also, who are some of the “wealthy” that you are talking about?

Robert D. Ashby July 24, 2008 at 12:42 pm

Chris,

I am not a “follower” of anyone, though I do agree with much of what Doug Andrew talks about, namely the “myth conceptions of mortgages”. As for the insurance angle, there is a lot of good in what he says, but it is not for everyone by any means.

I used to do financial services myself in the late 90s and into this century, but decided to focus only on the implementation of the mrotgage into one’s financial plans instead, after settling in Florida due to my pilot profession.

As for the “wealthy”, I read studies and ask my own clients. I have had several wealthy cleints and one in particular, who was 65 and never had a mortgage before, came to me to get his first mortgage. One good book to read is by Ric Edleman, called “ordinary People, Extra Ordinary Wealth”, where it is basically his clients’ views on how they created their wealth. Their #1 reason was the use of their mortgage as a financial tool.

My passion is for helping people obtain their financial goals and educating them on concepts not taught in the mainstream. These concepts are not new (banks use them), just they have not entered the “mainstream”, at least not yet.

Chad Bahnsen August 15, 2008 at 11:57 pm

Good discussion guys. Overall I agree with Robert. I’m a mortgage expert and was solicited by a United First rep regarding the money merge account. I listened to a 1.5 hour webinar, met a guy in person, did some research on my own, talked to my boss about it, looked on line, looked at pros vs. cons, etc. The rep wanted me to “jump on board” and become a rep myself if I paid them $175. I would then “sell” the product for $3500 to clients, making myself about $900 per sale out of the $3500.00. Of course the people above me in this “pyramid” make money off of what I sell to client…and if I sign up new “agents’ I get residual income from them. The bottom line facts are this: The software and knowledge that you get by paying $3500 is OKAY (even though you won’t get the interest writeoffs on your mtg and you could simply save the money in a CD and gain interest)…IF you can’t get a return on your money in the bank higher than the interest you pay on your mortgage. Regardless, to do the mortgage accelerator, interest cancellation, money management, etc that the money merge account suggests you DO NOT need their expertise or software. So even if you like the system (and there are some pros) you don’t need to pay $3500 for it!! Note that out of the $3500, $900 goes to my during my first few sales if I became an agent. About $1200 goes to the people higher up in the “pyramid” (not that pyramids are necessarily bad)…but the point is..salespeople make a lot of money “selling” people common sense!! Plus the money merge account only works well if you have disposable/constant income and you do the program diligently, and you have a HELOC or a decent some of money to start. The reps will tell you that you can do the program with $1.00 disposable income and without a HELOC. …which you can but not well…just proves the point that the only person who makes out on this are the salespeople. It’s kind of like if I told you to pay me $3500 for me to give you “my special software” to help you improve your credit, and by improving your credit (by doing what the software tells you) you can get a higher credit score and get a lower interest rate on your mortage, which will save you thousands….this is true. However, you can work on your credit on your own without “my special software” I’m all about “people helping people” and the money merge account is basically “people taking advantage of people”. I might start my own company and have people pay me $1000 and I’ll show them how to do the money merge account and they can keep the other $2500. lol.

Chad August 16, 2008 at 12:04 am

The money merge account would be okay if it was sold as an informational CD for $200.00, rather than for $3500.00

John P August 24, 2008 at 5:04 pm

Hello Chad,
I love it when industry experts try to knock something that is so benficial to a consumer. Where or when is the last time you invested 3500 dollars and got a return on your investment such as a program like this offers. Do YOU work for free? I thought not. If you represent the expert opinion of the mortgage industry, then the mortgage industry needs to be shaken up. After all, the people that tried to “recruit” you, certainly did not write all the loans that are now foreclosing, you mortgage experts did. So please spare the bs about lower interest rates through refinance. The only ones winning in this game would be the consumer, and that would totally destroy the good old, POINTS PER LOAN system that you now play with. It does not take a degree in ANYTHING to realize that the program, is designed to BENEFIT CONSUMERS, not lenders. It will be interesting to see if this makes your blog.
By the way, I am an unemployed x-telecommunications guy. As of yet I have no financial interest in United First Financial, but the more blogs like yours I read, the more I thinks its time to do for the consumer what you EXPERTS wont.
Regards
John
TX

bruce September 7, 2008 at 10:31 pm

Two words ERNST YOUNG .IF this was such a bad product and did not work and you could do it on your own, why did ernst young give them the entrepreneur award of the year. This is just not about mortgages its all debt. 1 debt10 debts 18 debts. It will get you 2 zero fastest way possible.I have done 13 months of research on the product and it is what it is.PLEASE DO YOUR RESEARCH. Ernst young did. Do you think for one minute that a company with a reputation like ernst young would stick there neck out for somthing that did not work.They did there research you can bet on that. Having said that robert i respect your views on this subject. Is it for everyone maybe not,for those who would like to earn intrest or cancel intrest 24/7 this is for you .

Robert D. Ashby September 10, 2008 at 3:59 pm

@ Chad – I have been approached by several of these agents in the past. Additionally, many falsely claim I have turned down invitations to see the program at work as I have only ever been offered to sit in on a presentation (actually about a hundred or so at this point). I have sat in on a few and attended webinars and at each one I have to hold myself back to maintain professional courtesy.

Do these programs work? Yes, I have said that all along. Are they worth the price tag? Absolutely not. Additionally, as I have proved time and again, other strategies are far better for the vast majority.

Thanks for adding to the discussion, Chad.

@ John P- First off, sorry to hear that you are unemployed and I wish you luck in finding a decent job.

Lumping Chad, or even myself, into the mortgage experts that sold loans to those being foreclosed is absolutely absurd, especially without proof. I cannot speak for Chad, but I can assure you no loan I have been involved with has ever been foreclosed upon. Why? I make sure they have their finances in order and if not, I don’t do the loan, period.

As for free, I only get paid when I close a loan, and that loan will be part of a comprehensive mortgage plan that helps my clients meet their financial goals and dreams the fastest way possible. However, many people write and call me from outside Florida, even inside Florida, and all I do is provide advice for free. Yes, I said free, but that is just me.

Now, if you run the numbers and employ other strategies, using the rules of money, you will find these programs are not worth the money, and, in fact, may be detrimental to the overall financial health of the homeowner.

I do not care if I make money and I certainly do not care if the lender makes money. I do, however, want to see as many people as I can become financially free and that may mean keeping their mortgage.

@ Bruce – Just because UFirst received the Entrepreneur of the Year Award from Ernst and Young does not mean their product is the best thing out there. Many companies are standing behind this product without comparing it to other strategies and even many mortgage professionals are now “selling” it because times are bad.

As I said to John, I do not care if I make money in mortgages. Why? Because I also fly planes for a living and that affords me the opportunity to bypass income from the mortgage business and still help people understand how money works and that other strategies beat the pants off Money Merge Accounts.

Will the Money Merge Account be beneficial for some? Yes, a small percentage. I will eventually do a post on exactly who these types of programs are for. And yes, my strategies are not for everyone, just those who would like to utilize their mortgage as a financial tool to accelerate their financial well-being.

Thanks again for all joining in this discussion. I enjoy hear the opposing viewpoints and welcome more of them.

Kim October 6, 2008 at 10:11 pm

I was approached by a co-worker at our County Fair concerning United First’s MMA program. My husband talked to them and found out that if you are disciplined, and we are, and you manage your budget well, this isn’t the program for you. We are upside down in our condo mortgage, but on top with our house mortgage. We have low interest rates on both and no other debt. Does something like a MMA even make sense for us? We couldn’t sell our condo in the current market and we are locked into an affordable home with the house for 10 years.

I will ask our financial advisor about this. My guess is he wouldn’t recommend it since he hasn’t already.

Your thoughts?
Kim
Maui, Hawaii

Robert D. Ashby October 8, 2008 at 9:09 pm

Kim,

The MMA is not your best bet based on the simple fact you are disciplined. As for the condo being upside down, I am presuming you owe more than it’s current value, so why rush to pay down the loan and put all of the risk back on your shoulders? If you are able to afford the condo’s mortgage payments, keep it and eventually the value will come back up.

With low interest rates on your mortgages, even in today’s environment I would suggest focusing on other investment objectives, even taking advantage of today’s drastically reduced stock markets. The cycle will return to the positive side and when it does, it would be nice to have cash readily available to take full advantage of it.

I hope this helps and please keep in mind this is very general advice. For more specific advice, or more “customized”, please use the contact page and we can discuss your situation in greater detail privately.

Paul October 11, 2008 at 9:30 am

Robert and all the naysayers…Its interesting how those with ‘some” knowledge always present and argue with such vehemence that one will think they are ‘experts’. Mr Robert, do you OWN this product? My guess is NO! Your main claim is that we can all do it on our own. Let me ask you a question. What are the two MAIN new year’s resolutions? Loose weight aka get healthier, and save money aka get out of debt. Wouldnt you say it is fair to conclude that more than 70% of people make these resolutions every year before the new year? Why then do MOST of us fail at achieving these goals? Its simple, we CANNOT do it on our own. The MMA is a guide that assists you on your path towards absolute freedom – as a user and as an agent. It holds your hand and guides you weekly, monthly and yearly on how to EFFECTIVELY and EFFICIENTLY get to your destination in a fraction of the time with minimal out of pocket cost. Another question: Imagine there was a guage on your fork or your spoon so that with every bite of food you ate , you are instantly told how much weight you gain. DO you think we will be a much healthier country because everyone will pay attention to what they consume and in what quantities? How will that impact our health care costs? What will that mean to our collective ability to spend more on other things? How will that impact the growth of other industries and the further distribution of wealth? Stop scaring people. Be fair and accurate. Yes you can do this on your own – if you have the time and the discipline to calculate your expenses and income every month and every year so as not to waste money on interest cancellations with prepayments. Most people know about bi-weekly payments, but only less than 5% of us do them. Why? Also, most people do not have that extra income to give up. What if they need the money in an emergency? How come most of us donot do our taxes. We sure can do it on our own. Why do we pay a CPA $300 – $500? Is it maybe because of the value we get? So if I am guaranteed to improve my equity position on all my debt by 5 times in a 12 month period, and in the process, get a 200% return on the $3500 investment, are you telling me this is a bad deal for me? I reject your argument. Its weak and from a “glass is half full” view point. FACT; 75% of wealthy billionaires interviewed in the May edition of FORBES magazine said the most secured way of building wealth is to eliminate debt!!! Should I listen to you or to them?

David Shafer November 6, 2008 at 5:26 pm

Wow this has really grown over the web.

1. A Hummer will work getting you place to place, but it will cost you alot more than other automobiles. As will the mortgage accelerator get you to a paid off mortgage, just cost you more to get there. Many, many people have run the numbers and concluded this.

2. Paying off your mortgage has been the typical advice for several generations, but the data demonstrates that this doesn’t help people create enough wealth for a comfortable retirement. Average amount in retirement accounts for the 55-64 year old cohort? $83,000 in 2004 (last year of available data).

3. Blaming mortgage originators for the foreclosure crisis is like blaming 6 year olds for the abandoned pet problem. Look to Wall Street that created the toxic sub-prime financial products for the blame. Comforming loan foreclosure rate is less than 1.5%.

4. Only people who do not understand basic finance would believe that a $3500 computer program will help them pay off their mortage more than just making early payments. So this “product” is another of those predatory products being aimed at the ignorant masses.

5. Ernst and Young gave the entrepenuer of the year award to these guys, not the “product of the year.”

6. Taking a look at the sales force for these products will tell you all you need to know about the product. Can you say Primerica??? This issue in financial services sales is very real. Even the best companies hire folks that don’t have any formal background in finance, are not highly educated and perhaps the biggest problem are not wealthy so they have no idea how to build wealth. They simply sell product to folks regardless if it works or is appropriate for them. They depend upon the fact most people are too lazy to do even a small amount of education on personal finance.

7. Arguing with these mortgage accelerator folks is useless because they are true believers and take everything about the product by faith.

Kevin Miller February 8, 2009 at 7:08 pm

Hello everyone,

It’s amazing how many people are buying in to this program simply because they don’t take the time to do some research and some simple math. There are a number of ways to pay off your mortgage faster, if that is your goal, that don’t cost a dime let alone $3500.00. I have compared a number of scenarios and in every case I was able to pay off the mortgage quicker and have more money saved in the same term. I personally believe that paying off a mortgage is one of the biggest mistakes people make financially. It isn’t a coincedence that 95% of the population isn’t prepared financially to retire at 65 and it is the same 95% of people that are trying to pay off their mortgage. I happen to agree with Robert about taking home equity and investing. Over the long term you are way ahead. I am going to ask a question here and no I am not crazy.

Do any of you think that borrowing money at a guaranteed 10% and investing at 6% would be a good idea?

Let’s take a look at the math here. Say I were to borrow $100k at 10% for 20 years on an interest only line of credit. Each year I will pay $10k in interest for a total of $200k over 20 years, however we need to keep in mind that interest paid on money borrowed to invest is tax deductible so take a 30% tax rate our actual cost of borrowing will only really be $140k. I will then invest that same $200k for 20 years @ 6%. $200k at 6% for 20 years will grow to $329,373.58. So, now I will pay back the loan, leacing me with $229,373.58, factor in my cost of borrowing brings me down to $89,373.58. Even after paying capital gains on the $229…. I will still be left with more than $50k.

Now, that is not something I would ever teach any of my clients to do. The point is, if it works in that crazy of a scenario how much better would it work if I borrowed money at 4% (say in a mortgage) and invest it and get a return of 8-10% over the long haul. Why would I ever want to pay down a mortgage at 4% when I could take and invest at 8-10???

The problem, I feel, is that people are not getting the information they need to make the proper decisions. Sure the MMA does what it says it will do, but it doesn’t do it well by any means. Do your research people, the guy I sat with at UFF is smooth. When I showed him that he was wrong and there was a better way he just said that we would agree to disagree. He was so caught up on all the hype of the program and the Ernst and Young award, which as stated was not for a good product. Also, keep in mind that was not a national award but a Utah region award.

Bottom line is, $3500.00 is a lot of money for something you could do better with a simple spreadsheet.

Garfield Duncan March 30, 2009 at 4:45 pm

I have been stressed by a friend and this product. In the scenario that she drew up for me, she had me paying off an additional $45k in the first year. In this scenario, it was simply doing this by making my payments more efficiently! An extra $100 per month would be the primary change to make this work. Additonally, she said that program would pay off two small business credit accounts I have-on which I pay $500 per month and “strategic” payments would get me to having paid $45k additional on principal on the first year. Simply put, that is impossible. Basically, to accomplish this, the I would have to use my entire savings, and use every extra dollar I have. The “conservation of matter” also applies here. You wll not make these strides unless you take this money from somewhere.

As a real estate investor, I have good reason not to commit these funds to my properties; because I cannot use the equity in my property to put food on my table or to pay my mortgage. Equity in property cannot be invested in the market and so provide no return. The $45k that I would pay out would limit my investing options such as purchasing a 3bed/1bath home in market and renting it out for $8400 per year-an almost 20% gross return. This example also works for investing in a CD or the market.

I think you would be better off paying the $3500 to your mortgage if you so desired that paying for the software.

Robert D. Ashby June 4, 2009 at 9:38 am

Wow, good discussions going on here from both sides, which i like to see and believe the readers do as well. I have added in some comments that got lost in the mix here, so there may be one or more above that you haven’t read yet. I apologize, but I don’t have much time to get in and approve all comments quickly, nor drag them out of my spam filter if they are legit. Let me see if I can address some of the comments over the last 6 or so months.

@ Paul – To answer your question, no I do not own the product, though I have asked for in depths demonstartions or a trial run, but no one has offered it to me. As for your remarks on “some” knowledge, it is extremely judgmental to assume I lack adequate knowledge, and your assumption is incorrect. One thing I do agree with is that hardly anyone follows through with their commitments to a program, and that includes MMA purchasers.

As for fairness and accuracy, I am being both, though most MMA sellers are not. I have yet to see a comparison by an UFirst agent with a comprehensive mortgage plan that is been integrated as part of an overall financial plan. Most of that problem lies in their own “knowledge”, or rather lack thereof. Also, most liekly they don’t present it because the outcome may very well be different than a MMA sale.

Regarding why only 5% follow biweekly payment plans, the answer is likely simpler than you thought. They are not worth it either, especially those you have to pay for.

You asked this question…”So if I am guaranteed to improve my equity position on all my debt by 5 times in a 12 month period, and in the process, get a 200% return on the $3500 investment, are you telling me this is a bad deal for me?” Here is the answer…Maybe. You talk about increasing your equity position in all of your debt 5 times in a year and getting a 200% return on your investment (that return is spread out over the remainder of the loan by the way). That would mean you don’t have much money and/or debt. Irregardless, what if another strategy offered 10 times greater equity position or a 500% rate of return? Still sound like you made the best choice? Not likely.

Your argument about people not having enough money for an emergency actually is one I have done in the past right here on FMR. It actually proves my arguments, not yours. After all, why would anyone without enough money to handle an emergency dump all of their money into their home, where they can’t access it in an emergency? Not very wise, is it?

As for Forbes, a couple of things. I never managed to read, or even find that article online, but you have to understand something. Many, if not the majority, of wealthy billionaires live aroudn the world and that prevents them from taking advantage of US benefits, such as taxes and even fixed rate mortgages. Also, many do not consider their mortgage as a “debt” in regards to what needs to be paid off. Just some thoughts.

@David – Thanks for sharing your analysis and you hit some really good points.

@Kevin – Not sure if your math is correct, but it does show a point I have made several times before. You can earn less interest than your mortgage rate and still be way ahead. Thanks for the comments, and yes, those UFF Agents are smooth, they are trained to be that way.

@Garfield – Thanks for your input from a real estate investing point of view. UFF Agents will sell on the fanatical, such as the extra $100 per month can save you $45,000 in one year as if you realized that kind of rate of return in just one year. The reality is that savings is spread over the remainder of the loan, not an “immediate” savings. What they fail to tell you is that that same $100 per month, over the same time, could yield an overall savings far exceeding $45,000.

Bottom line is they misrepresent things in order to daze and confuse you into signing on. I have seen it time and again, a lot of which I have presented here.

Thanks to all for the continued discussion and let’s keep it up.

PJM June 23, 2009 at 8:59 pm

Robert says he agrees with Doug Andrew… yet Doug Andrew recommends the Money Merge Account as the perfect companion to an equity harvesting strategy (his words at a UFirst convention).

Robert says “no one will show him a demonstration” of the program, yet there are videos on the web that anyone can watch that demonstrate the software.

I’ve been with the company, and using the program for over 3 years. The “nay-sayers” all say that this is “bad” because someone can do it themselves. Yet many of them are financial planners and mortgage brokers (like Robert) that are also selling a service that ANYONE could do themselves. You certainly don’t need a mortgage broker to get a mortgage. In fact, many people in this country would have been a LOT better off had they got their mortgage from a nice conservative bank that wouldn’t allow them to “over-borrow,” rather than a mortgage broker trying to amp up their commission as high as possible.

Frankly I am continually amazed at the “professionals” who will render an opinion on a product they have not even used, and at the same time will completely discount the thousands of people who HAVE used it and say they love it. You would think they would be worried about their credibility.

Of course I think that many of them (wrongly) perceived this program as some kind of threat to their own business. If they were more open minded, they would see that it is the opposite. This program is the missing piece of the puzzle that their clients have needed all these years. Some of them HAVE recognized this, and as Robert points out, many of the “gurus” are now saying how great this award winning program is.

See.. this program is not about math, or software. Those are just “features.”

This program is about having a “MAGIC MIRROR.” What I mean is this…

If you were on a diet and exercise program and you could get up every morning and look in the mirror, and that mirror showed you NOT what you look like today… but what you WILL look like if you stay on your program… do you think you would be more likely to stick to it?

Of course! See the reason people don’t stick to diets… whether they are a food diet or a debt diet, is because they don’t “see” the effects working quickly enough to motivate them. They don’t get an “instant gratification effect” for doing the right thing. They lack an accountability system.

This is what the Money Merge Account system provides and why over 95% of clients that get on the program STAY ON TRACK. The average client gets better results than initially projected.

Of course that is over simplified by a long shot. The program does SO much more. It handles multiple mortgages and debts at the same time… always calculating the exact quickest way to zero, paying the least in interest (and no, it’s not higher interest rate first when you have both amortized and revolving debt in the mix together).

It is constantly being upgraded with new (free for clients) features. In the next incarnations it’s going to be able to do separate P&L’s for different entities. I heard up to 30 entities and up to 75 lines of debt.. but I cannot confirm that as its only “grapevine info” so far. It is going to be able to update from .csv file imports and to be able to pay bills and update itself automatically. There are about 20 new features being added in the next “version.”

Robert wants you to think that industry experts and “gurus” are backing this program up now because their integrity is for sale. Really? Somehow I don’t think that most highly successful people got that way because they lack ethics. In fact I think it’s quite the opposite.

I propose another possibility…. that these experts are open-minded enough to do actual investigation and to look at new information as it comes in. That they are scientific enough to know that it’s impossible to “pre-judge” something based on superficial information and that to have all the information, one needs to actually experience and use something in order to fairly judge it’s value.

““There is a principle which is a bar against all information, which is proof against all arguments, and which cannot fail to keep a man in everlasting ignorance— that principle is contempt prior to investigation.”

JimmyDaGeek July 3, 2009 at 12:09 pm

“Using the banks money” – We started out by taking out a loan called a mortgage, using the bank’s money. Now that it’s time to pay the loan back, we need to get the money from somewhere. Usually, it comes out of our paycheck. But MMA claims that if we use a HELOC, we are not using our money anymore, we are using the bank’s money. But, wait, we started all this by using the bank’s money to take out a mortgage and now we have to pay it back. So that means if we use the bank’s money by taking a loan out of the HELOC, we have to pay that back, too. So all we did was postpone having to pay the bank back by using the HELOC money to pay the mortgage. We still have to pay the HELOC back. Where is that money going to come from? Out of our paycheck. So why should we spend $3500 on MMA to play a money shell game with a HELOC?

“Interest cancellation” – MMA claims that by loading up the HELOC and running our paychecks through the HELOC, we reduce the balance so much that we save lots of money that way, and that alone is worth $3500. OK, so how much can we save? Well, let’s assume our mortgage rate is 6%. That means each month, we are charged 1/2% on our mortgage balance, the whole balance. But if we are using interest cancellation, the most that we can save is whatever our monthly salary is. So, if we bring home $5,000, the largest HELOC balance we can offset is $5,000. How much will that save? $5,000 times 1/2% is $25. That’s $25 per month or $300 per year. So MMA wants you to spend $3500 upfront to save $300 per year. Do you know how much interest you would save if you just put $3500 towards your 6% mortgage? OVER $16,000 and 16 months. (Not $4000 as I said in a different post)

“Factorial math” – MMA claims no one except a computer can figure out the best possible way to pay all your bills and debts because of all the possible combinations. LIES. There is only one SIMPLE BEST way to pay off all your debts. You pay off the highest interest debt first and work your way down using a DEBT SNOWBALL. It only needs addition and subtraction.

Florida's #1 Mortgage Planner July 14, 2009 at 9:10 pm

I am sorry for the length of this next reply, but it is justified due to the arguments PJM presented and how I show he is incorrect in his assumptions of me, and in fact show that Douglas Andrew stole my idea about using the mortgage acceleration concept and equity harvesting together, but I guess PJM didn’t do his research or he would have found that truth…

Here is what PJM wrote and my comments added in…

Robert says he agrees with Doug Andrew… yet Doug Andrew recommends the Money Merge Account as the perfect companion to an equity harvesting strategy (his words at a UFirst convention).

Doug Andrew stole my idea, one which I wrote about 2 years ago and Doug Andrew only recently added to his discussions. When I wrote back then, I believed in the MMA, however after additional research, anyone whom exercises the concept of equity harvesting can do it without wasting their money on the MMA. Additionally, every time I have compared strategies, equity management has always prevailed. The whole mortgage acceleration concept is good; however no one needs to pay excess money for a “web-based financial software program”. Chances are Mr. Andrew, like most other “professionals” that have jumped on board, see it for the money they can make due to their “brand”.

Robert says “no one will show him a demonstration” of the program, yet there are videos on the web that anyone can watch that demonstrate the software.

I have seen all of the videos and they don’t explain exactly what the program does, which is nothing more than basic mathematical calculations that any financial software program, including Quicken, can perform. I have asked repeatedly in the past for a demonstration of how the program differs and justifies its expense, and that request has remained unanswered, though people like yourself try to confuse the issue saying everything you need is available on the internet.

I’ve been with the company, and using the program for over 3 years. The “nay-sayers” all say that this is “bad” because someone can do it themselves. Yet many of them are financial planners and mortgage brokers (like Robert) that are also selling a service that ANYONE could do themselves. You certainly don’t need a mortgage broker to get a mortgage. In fact, many people in this country would have been a LOT better off had they got their mortgage from a nice conservative bank that wouldn’t allow them to “over-borrow,” rather than a mortgage broker trying to amp up their commission as high as possible.

Once again, people like you try and lump me into a stereotype which I do not belong, accusing me of encouraging people to over-borrow just to “amp up my commission”. I suggest you read the testimonials and look at my track record (no foreclosures, no borrowing beyond limits, all financially sound). Even today, the financial knowledge I provide is quite welcome and that is even though I do not get paid for it. That’s right; I provide my advice for free, believe it or not. While I am still licensed as a mortgage broker and my company is still licensed as a mortgage brokerage business, I have taken the company into a new direction, one that is purely advocatorial. In fact, within the next month, you will see an announcement for my newest service, one developed over the last year or so due to the growing demand for my assistance in protection against scams. And you cannot get a loan without a loan originator, whether mortgage broker or bank employee. Statistics have shown that the consumer has been better off getting their loan from a mortgage broker because they can usually get a better rate than going directly to the bank (and yes, I have a testimonial showing that fact).

Frankly I am continually amazed at the “professionals” who will render an opinion on a product they have not even used, and at the same time will completely discount the thousands of people who HAVE used it and say they love it. You would think they would be worried about their credibility.

Most UFF agents have no credibility, sorry. Have I used the program? No, nor do I care to spend $3,500 just to take it for a “test drive” when I can accomplish the same tasks on my own for free. Why do people love it? Simply put, because they don’t have to think or even take responsibility, well, except for to visit the website once in a while and do what it says like a puppet does what the puppet-master wants.

Of course I think that many of them (wrongly) perceived this program as some kind of threat to their own business. If they were more open minded, they would see that it is the opposite. This program is the missing piece of the puzzle that their clients have needed all these years. Some of them HAVE recognized this, and as Robert points out, many of the “gurus” are now saying how great this award winning program is.

Several “gurus” have signed on. Most have not. In fact, most argue against it still, such as Dave Ramsey. Heck, I figured Suze Orman would be all for this program and she hasn’t signed on, at least not that I have seen. Award winning program? Not sure what award that was, but if you are referring to the Ernst and Young award, that was for the company, not the program.

See.. this program is not about math, or software. Those are just “features.”

This program is about having a “MAGIC MIRROR.” What I mean is this…

If you were on a diet and exercise program and you could get up every morning and look in the mirror, and that mirror showed you NOT what you look like today… but what you WILL look like if you stay on your program… do you think you would be more likely to stick to it?

Of course! See the reason people don’t stick to diets… whether they are a food diet or a debt diet, is because they don’t “see” the effects working quickly enough to motivate them. They don’t get an “instant gratification effect” for doing the right thing. They lack an accountability system.

This is what the Money Merge Account system provides and why over 95% of clients that get on the program STAY ON TRACK. The average client gets better results than initially projected.
Of course that is over simplified by a long shot. The program does SO much more. It handles multiple mortgages and debts at the same time… always calculating the exact quickest way to zero, paying the least in interest (and no, it’s not higher interest rate first when you have both amortized and revolving debt in the mix together).
It is constantly being upgraded with new (free for clients) features. In the next incarnations it’s going to be able to do separate P&L’s for different entities. I heard up to 30 entities and up to 75 lines of debt.. but I cannot confirm that as its only “grapevine info” so far. It is going to be able to update from .csv file imports and to be able to pay bills and update itself automatically. There are about 20 new features being added in the next “version.”

Wow, same arguments over and over again. I am getting tired of repeating myself. I am glad the features keep getting added. I do want to point out something it appears that is still being encouraged, which is comingling business and personal funds. If you do that, watch out if the IRS finds out as the love the term “imputed income” and if you are not paying tax on it, the penalties could wipe you out.

Robert wants you to think that industry experts and “gurus” are backing this program up now because their integrity is for sale. Really? Somehow I don’t think that most highly successful people got that way because they lack ethics. In fact I think it’s quite the opposite.

I propose another possibility…. that these experts are open-minded enough to do actual investigation and to look at new information as it comes in. That they are scientific enough to know that it’s impossible to “pre-judge” something based on superficial information and that to have all the information, one needs to actually experience and use something in order to fairly judge it’s value.

I agree wholeheartedly, though one does not need to experience the actual product to understand its value, rather understand its operation and worth compared to other products and strategies available. When mortgage acceleration first came about, I liked the concept though I did not necessarily like the MMA. Again, I was the first person to present the strategy of using an MMA and equity harvesting in conjunction with each other. However, after extensive research, and watching the numerous videos on the web along with my own calculations, I have concluded time and time again that the program is not worth the cost and that, though the concept has merit, other strategies are better for the vast majority of homeowners, even in today’s economic environment.

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