Chuck...Most of these agents are trained in their programs and how to sell them.  While the program is good for some and the training on the program is generally good, it is very one sided and certainly does not qualify anyone to be an "expert" in the overall industry, maybe in the product itself.  While licensing is a step in the right direction, many licensees don't know what they are talking about either.  Yes, most "rich" people do not pay off their mortgages and opt to continue leveraging their money instead. 

Also, this guy is located in West Palm Beach, not Pembroke Pines.  I kept his name out to protect his identity.

Shawn...Bi-weekly payments are not worth anything, especially not these days.  There are much better ways to go about handling your mortgage.  In my opinion, they are a complete waste of money, even the free programs.

Ronnie...Thanks.  It seems that everyone wants to get in on the latest fad to get rich quick.  While there are no "overrides", the pay well on the sale and the more people you have on your "team", the more you make per sale.  There are some who would benefit from these programs, but ALL options need to be looked at in an unbiased way.

Shane...I am glad you enjoyed the info.  I have not met anyone yet that is more than 1 year into these programs, so I cannot say for people sticking with them.  Life does throw things at you, so everyone must be prepared and focusing on paying off your mortgage as to investing may lead to financial destruction.

Jeff B...I agree that too many people in our industry are stuck on one product or even one solution.  There are a vast array of strategies out there and mortgages can be, and should be, "customized" for the individual client.

Matt...These programs are being marketed heavily.  In fact I will be doing two posts (one is up already) on issues surrounding the marketing of these products, one on the Asher Institute and the other isn't about them, rather on presentation skills as I witnessed during one of their sessions over the weekend.

Bill...Controversy can be very interesting at times.  While I do not "try" to create controversy, I do occossionally write about controversial subjects and there are many controversies surrounding Money Merge Accounts and other Mortgage Acceleration Programs.  I like the programs themselves as they do benefit some people, but they are marketed in deceptive ways, one of which is the subject of this post.

Charles,

First off, since you want people to see the original comment you did, I will post it in its entirety here after this comment.

I would like to commend you for being being in better financial shape than most.  Having a HELOC does help some, but is not a "cure all" for financial emergencies.  I am guessing you are single by your comment which means your expenses are generally lower, so the HELOC may be fine for your situation. 

You say that now you can invest every penny toward investments since you own your condo free and clear.  This suggests that you do not understand the time value of money as you are years behind in where your investments could have been. 

By the way, I never said you were stupid, simply highlighted the fact that the comparison you used was not a genuine comparison as people can earn more than 4% very easily.  That misinformation can lead to a wrong decision.  Also, it is not simply about mortgages and leveraging money.  Bringing more of a financial planning aspect into mortgages is what mortgage planning does.

There is no one strategy that works for everyone.  The Money Merge Account, Home Ownership Accelerator, or whichever is the best solution for some as I have stated many times before.  But what I want people to know is that there are other options out there that may be better for them, including strategic equity management.

You stated...

"Here are the cold hard facts: The main reason people don't pay extra to their mortgage or ever pay it off is because they can't handle their finances on their own. Even people who have financial planners tend to go off the path of the planner's advice because they cannot be watched all the time."

There is some truth in that statement I will admit.  But, how do explain why millions of Americans that have enough money to pay off their mortgages right now elect not to?  They also live stress free and "financially free" despite having a mortgage payment.  They maintain their mortgage because they know and understand how money works.

Truth be told, I would not recommend any mortgage acceleration program if it was not in the best interests of the client even if it was free!  Being free does not mean that it will not hurt them financially in the long run. 

Again, I am not bashing the Money Merge Account or any other mortgage acceleration program by themselves, just how they are being presented.  Yes, I do not like the $3,500 price tag UFF charges and others may charge more.  But then again, I do not recommend to any of my clients to do exactly what CMG states to do in their program (refi everything into their HELOC).  Therefore, the costs are minimal in the strategies I choose for them, almost always less than $3,500 and sometimes at no cost at all.

Here is Charles' comment I based this post on...

"Here is a case study for a client I am putting into the Money Merge Account:

$244,000 @ 6.875% Fixed 30 Years =3D $1,602.91 monthly (just closed this month)

Discretionary income is $1,000 monthly. Clients make $4,616 a month.

IF they were to payoff the mortgage themselves using their discretionary income they would payoff their mortgage it would be paidoff on August 15, 2018. You can verify this by going to Bankrate.com:

http:///www.bankrate.com/brm/amortization-cal  

If they were to take their $1,000 a month and put it into a SAFE investment earning them 4% a year return, they would have $694,049.40. You can verify this by using this savings calculator (you need java):

http://www.domini.com/learning-planning/Investment-Calculators/Savings-Calculator/index.htm.

Now, that all sounds great, but lets look at the Money Merge Account:

Using the Money Merge Account the client will payoff their mortgage on JAN. 2017 which is 1 YEAR AND 8 MONTHS SOONER and they would have $995,584.83 in investments if they invest what their discretionary income + what they were paying on their mortgage for the remainder, which comes to $2,602.91 for 247 months.

So, which sounds like the smarter way to invest? As you can see, this client pays off their mortgage faster with the Money Merge Acount AND has more to retire on. So, I would suggest everyone get more informed about this product before they bash it. You can learn more on our website at http://www.mortgageaccelerationllc." 

Note:  Keep in mind my post showed that this same scenario, with only a 6% rate of return on the investment side, could pay off the mortgage 3 months earlier than the MMA could based on his example.  That is why I made the post.

Charles,

First off, thanks for the continued discussion and I agree that we disagree.  I like these discussions as they allow readers to see varying points of view in one place.

Now, the reason for guessing you were single is that, in my experience that people your age that live in condos are generally single (I was wrong, sorry and I apologize).  Without have a full spectrum of your situation, I can only guess, something I do not do with clients as I take them through a multi-step process to ensure they get on the right program.

As I stated befroe, you are definitely much better off than the vast majority of Americans, and this post is for them.  The time value of money basically means, due to compounding rates of return, that the more money you have working for you now, means the more you will have in the future (oversimplified).  I commend you again for being in the position to pay off the condo and invest at the same time, 99% of Americans cannot do that.

I disagree with your answer about the wealthy being "programmed by financial planners to keep the debt and invest".  The wealthy have been doing it for hundreds of years, basically since the invent of mortgages, and before "financial planners" really took hold.  That being said, the Journal of Financial Planning, the publication by the Financial Planning Association (CFPs), had sevral articles a few years ago that encouraged these concepts and still talk about it today.  Not for commissions, but because of the ability to leverage money to make money, the same thing the banks do.

Regarding tax benefits.  The tax rates are at their lowest right now (well, close to it), so the benefits may not been seen as clearly.  But remember back in the early '80s when President Reagan took office, the tax rates were up to 70%!!!  I would not be surprised if we head that way again, hopefully not that high though.  The higher the taxes, the less "net cost" of a mortgage, and the ëasier it will be to make money in tax-free investments.  That is the benefit of tax deductions, that you can keep the costs of borrowing down so you can make money elsewhere.  Again, doing exactly what the banks do.

My comment about Interest-Only was not off.  The point I was making, was not about simply placing them into an IO mortgage (anyone can do that), but that they could invest the money and be in a position to pay off the mortgage quickly, while maintaining a more flexible position (able to gain more rates of return and liquidity).

The Icelandic Krona investment I was talking about is a CD, not a Bond or Currency Future.  The rate of return is like a CDs, the only risk is exchange rate risk, which can be minimized if you know what you are doing and the term is only 3-months (hence the APY is significantly higher).  The point was that it is easy to find places to make more than 6% after tax or tax-free.  I do like your comparison with high yelding dividends which actually helps me prove my point.  I own PGH (currently yielding 15.6% in dividends) and I would also mention PTY.  While its yield is lower, it has a long track record of paying divdends (current yield is around 9.5%). 

So, using PGH, one could see how they can borrow at a net cost of about 4.875% and earn 15.6% (in an IRA or other tax-free vehicle) or, since dividends are taxed only at 15%, 13.26% after tax.  If I used that figure in my comparison, the mortgage would be paid off a lot faster than a MMA, as if the investments only did 6%, the investments could pay off the mortgage 3 months faster than the MMA.  Imagine what 15.6% or even 13% would do.  They could be in a position to pay off their mortgage faster and then invest every penny after that, thus being a much better strategy than the MMA ever could be in this case.  (I use 6% as I like to be very conservative in my comparisons.)

I disagree that my approach is not balanced.  In fact, many CFPs would say this is a much more balanced approach than paying off your mortgage.  Bert Whitehead (a CFP) wrote a book, titled Facing Financial Dysfunction, and mentions that fact.

No offense, but being a licensed mortgage broker since 1996 does not mean that you are necessarily more qualified than others.  Sure, you have been around for a while and are, more than likely, fully qualified to write mortgages.  But, when it comes to mortgage planning and equity management strategies, the level of expertise needs to go far beyond that.  I believe that you are one of the more qualified, even if we do not agree.  But, how many of those mortgage brokers, either new or "been around for years", do not know how to be advisors, and simply know how to do mortgages with no expertise beyond that.  That would be the vast majority in my opinion.

Yes, we have differences of opinions.  Where you are wrong though is that I am not "bashing" these programs.  I like mortgage acceleration programs for some and I have stated that numerous times.  The problem comes when people use false, misleading or inaccurate comparisons when providing solutions.  The Asher Instute report is a prime example.  This report twists reality and makes false statements.  I will not stand for that type of behavior and the consumer needs to know the truth. 

If you do not believe I like these programs, read this post (Equity Harvesting, Money Merge Accounts and the Benefits of Using Both) or talk to Jason Leone.  He misunderstood what I was trying to do, but realized later, particularly with the post above, that he had a misconception about me.  I am not hear to make friends, just to try and educate the consumer as much as I can.  The point is that people cannot make an informed decision if they were never educated properly.

Again, thanks for your continued discussion and for providing your opinion.