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Money Merge Account Mortgage Acceleration Programs: Not everyone thinks they suck

One of the most controversial topics that I have run accross here on Activerain is when ever I post about liking the MMA mortgage acceleration type programs. There are some people that truly believe that the MMA programs are just scams and they are going to "Destroy a part of the market" (this was an actual quote from someone about the MMA)

I have had all kinds of responses (when I say response I really mean attacks and insults) like "It's a Scam" or "you are selling Snake Oil" or "You are lying because the Math does not add Up" or " you should always have a mortgage to take the Tax benefits..to suggest otherwise is just irresponsible"..And the list of response goes on and on as to why the MMA is terrible.

All I do is try to preach the benfits of the MMA and the "objective" reality of them and how they can be a powerful option for the right person under the right circumstance...

I started to think that I was the only one here at Active Rain that actually liked the MMA...Then something funny started to happen....Some people really started to see that I was being sincere and not just trying to sell them "snake oil". Some people started to really investigate this Newer concept of paying your mortgage. Some of the vehement MMA "nay-sayers" started to relent and admit that the MMA is NOT as bad as they first thought and that they were NOT fully Understanding the concept when they were doing their "nay-saying"....It was a Nice surprise...

I also stated to see some other "Raving Fans" of the MMA come out of the wood work...Below is just a sampling of some comments of others who love the MMA and how they articulated the benfits of the MMA better than I ever could have.

Taken from the responses to the following post: Money Merge Accounts: Are They Really the Best Thing for You?

"I would like to say something about this. I do financial planning and use mortgages as a tool to free up homeowners money. By using idle money in your house you can accelerate your retirement by 20 years. The rule of thumb is if you let your money grow and keep it in a safe investment vehicle then you will accumalate enough cash to pay off your house if need be in a side fund. The problem with this is most people don't stick to the plan. With Money Merge homeowners can have the best of both worlds.Invest idle dollars for retirement from your equity and pay your house off in record time through the MMA. A couple of key factors are to put your money to work in a TAX FREE environment with a reasonable rate of return with limited risk. Most homeowners still want the dream of OWNING there home. This is a perfect solution. Tax free investing, tax free accumalation, tax free withdrawel and tax free transfer of wealth to heirs = no need for mortgage interest deduction at retirement.

If you ask the homeowner to use the new saved money they were using to pay there mortgage and put it to work in an investment vehicle, believe me, it will never happen. Homeowners need it simple and that is what MMA does.

Thanks,

Mike

03/20/2007

by Mike"

And then is there this one which is my personal favorite taken from the response of the same post:

"I have to say that this is the finest posts I have seen on the internet. Respect, kindness and people reasoning one with another. I wish i could embed a round of clapping in my post.

I would like to make a comment on this, as I might personally be a hybrid situation. I was a client of the MMA before I started selling it, and I have to agree with everything here so far.

I'm married, have nine children (yes, I said 9), and I had just bought a home one year previous to being told about the Program. I took my own 29 year mortgage and shaved off 22 years and $109K in interest. Now, there are other factors here. I didn't have the discipline to do anything like this on my own, and this Program has helped me keep on track.

However, I agree completely that this (or any other product or program) is NOT for everyone. It fit perfectly with mine and my wife's goals, our means, and our financial situation. My own personal standard of living has improved each month, and I will soon have the option of buying a second property and start building rental income for my future.

Now, I'm no whiz here. I'm just an ordinary guy with a passion for something that has helped me personally. But you HAVE to do your homework. My brothers and I at The jubilee Project encourage people to back off. Not because we don't want them to buy an MMA, but because we want them to choose what's right for them and for their families...not because they bought into some hype!

PLEASE don't rush. There's no need, and as it's been stated, talk to professionals. Look into ALL your options. See what's right for you. I only sell ONE Product...but I simply can't live with someone jumping on something due to emotional excitement alone. Invest in yourself and due the time when it comes to research.

I believe the MMA Program and others will become the wave of the future, simply because they have merit and they work. No, they are not for everyone...but I think they will be improved upon and adjusted as time goes on, and they will fit more and more.

Thank you for such a good, calm, respectful conversation.

I spend most of my time having to battle emotional anger and unfounded accusations.

It's nice to visit a place with class.

God Bless.

03/27/2007

by Jaime Buckley"

Thank you guys for making me feel that I am not that crazy after all

Keith

http://www.LoanAcceleration.net

Posted by Keith Gill on 03/27/2007 04:21 PM

Comments (17)

mmm, money merge accounts, u1st financial, map, mortgage accelerator plus, heloc, aloc, equity acceleration

17 Comments on Money Merge Account Mortgage Acceleration Programs: Not everyone thinks they suck

MAR

2007

Hi there guys,I certainly am happy to see people are at least open to the idea of using a mortgage accelerator tool to their advantage.Of course not for everyone, but most homeowners.Here's a posting I posted elsewhere to sum up a response. I hope you can relate at least.----------- Original Posting ---------------Hi folks,In response to what has been said, let me just say that while this program (which is based on "mortgage cycling" or mortgage acceleration, used in Australia, New Zealand, UK and South Africa to name a few) is truly unique and does work, it is not for everybody.Let me repeat, paying off your mortgage in 1/3rd to 1/5th the time may not be in the best "interest" for the homeowner if not put into perspective in the complete overall financial picture.The only way to justify the cost of paying for any type of the mortgage accelerator-type accounts or loans on the market today, is to have a Total Cost Analysis prepared by a Professional Mortgage Planning Consultant not by just a person selling a system at $995 - $4500 (The varying costs I've seen out of the 4 outfits in America).I do have a very in-depth Excel spreadsheet calculator that duplicates what is revealed in the math on the MMA video. It is comprehensive and I provide two types of reports for all my clients and prospects: A Mortgage Acceleration/Equity Buildup Analysis and a Total Cost Anaylsis. The reports also show tax savings, interest savings, asset accumulation (if one invests the savings in a interest earning investment), and also the total cost of securing ANY new type of debt restructuring, which included paying for the costs of a NEW loan/Mortgage Accelerator Fee.$3500 to pay for the MMA is a good investment "IF" properly analyzed to its' true cost over the time of the loan AND the total savings earned from this fee or closing cost.Remember folks, whenever you obtain a home loan/mortgage for the purchase of your house, you have closing costs or the cost to obtain money. Rarely does it ever cost just $3500 in closing costs for a $200,000 mortgage. On average, you could see on your final HUD statement, closing costs of $5000 - $8000 on average in closing costs.Now, I know it's not fair to make an apple-to-apple comparison of paying a $3500 fee for a MMA system to closing costs on a loan, but think of it this way:1. You pay up to $8000 (0r more) for the "right" to get a 30 year mortgage and pay nearly 2.5 times the amount of the loan in payments over the course of the loan term. [I base the closing amount on an average loan amount of $200,000].Or2. You pay $3500 to use a MMA or pay more or less to use a similar Mortgage Accelerator-type of loan system to SAVE in interest and years off your mortgage, WITHOUT changing your current spending habits or income.Lastly, as I said above, THIS IS NOT FOR EVERYONE. The financial discipline you have in place BEFORE you implement ANY TYPE of Mortgage Accelerator System (there are a handful in the United States and I can give you the run down on ALL OF THEM, as I am considered an expert on mortgage cycling) will greatly affect your success in this type of mortgage acceleration.Quite frankly, if you spend less than you make, utilizing ANY Mortgage Accelerator Calculator (mine included) you will TRULY be able to pay off your mortgage more quickly than ANY traditional loan product on the market today.Your best bet is to obtain a Total Cost Analysis breakdown of the new debt restructuring involved when pursuing ANY type of Mortgage Accelerator product (including, but not limited to The Money Merge Account from U1stFinancial).Sincerely,Ed BisqueraMortgage Planning and Accelerator ConsultantP.S. In this long reply of mine, I forgot to mention that every one of the aforementioned ways of paying off your mortgage (bi-monthly, paying extra in pre-payment, etc) are acceptable and viable ways of achieving principal reduction. Yes everyone is correct in this way of thinking.But the major point of ANY mortgage acceleration system on the market today(CMG's Home Ownership Accelerator, Macquarie's Asset & Equity Manager, , is that you can use your income to offset interest charges.That's it in a basic nutshell: Reduce the amount of principal that the banks charge you interest on and you achieve a shorter payout time/less interest charges on your loan.Just think of this sometime folks: How much money in 3 years do you "cycle" or run through the banks accounts? If you make let's say $3000 a month, that's $36,000/year or $108,000 OF YOUR MONEY, being placed into the bank's circulation of money.Wouldn't it be nice if YOU were the Bank of YOU instead of the Bank of THEM? And were able to apply that $108,000 against your mortgage on your house? That's how this system works...creating the ability to be the Bank of YOU.Again, this is not for everyone but for some people out there, it can work wonders and you'll free up resources to invest in real estate investment properties AND APPLY THE SAME MORTGAGE ACCELERATION TECHNIQUES to rapidly pay down on investment properties. Email me or call me; I'm available for FREE consultation and I'll show you why you should or should not do this system. And I'll honestly tell you whether $3500 is worth spending in your financial situation.Best wishes....Ed

SEP

2007

I know the feeling I just battled it out at the following link, its a lot to read but you will get a very good idea on how people do not at least study the MMA before they decide what they think about it. My name on this thread is E101 with the American flag. See link below, enjoy

http://www.fatwallet.com/t/52/741118/11162510#m11162510

I'd like to know how you pay off a 30 year note in 12 years. Even at 0% interest, you still have to pay off the principle. So you either have to up the amount you pay every month.

For example, a $200,000 loan at 6.5% over 30 years is $1,265/month (P&I). If it was at 0%, it would be $556/month. So assuming the bank decided to magically not charge you any interest, and just said "pay us the same monthly payment until the original $200,000 is paid off, and we are all square". That would still take over 13 years ($200,000 divided by $1,265).

I'm all for loan reduction, but you are adding this whole "it's so complicated that you can't understand it, but TRUST US, it works" bull to confuse the average Joe and aid your scam. You are promising to shave "22 years off of a 29 year remaining term" when that is just not mathematically possible without increasing the amount of your payment. Of course, your answer to this is always "you just don't understand." And you write plenty of your own text in these ads to make it look like dozens of people agree with you, when you are indeed just selling snake oil.

Want to shave time off of your mortgage? Do a bi-weekly payment (free to set up with most lenders) and add one extra payment a year to your principal. You are in effect doing the same thing that these scam artists are asking of you - to pay more towards your mortgage every month or year. They are going to give you all these complex financial calculations and formulas to confuse you, but at the end of the day you will only have paid $3,500 for a Quicken knock-off that tells you to PAY MORE TOWARDS YOUR PRINCIPAL. Duh...

Keith:

I'm sorry you felt threatened in the past. I completely disagree with the premise of paying off your mortgage, and yes, I'm pretty passionate about it. I''m dealing with the foreclosures that came from little or no liquidity here in SoCal every day, now. Given my druthers, I'd rather see someone invest money in a liquid account than to pay down their home; it's just SAFER.

We have a bank in SoCal that's been offering a product similar to the MMA since 2002 (the marketing director was from Australia). Wachovia (nee World Savings) has offered their "Equity Builder" a true bi-weekly payment program, since I've had my first neg-am loan (1994).

The MMA is a fine product for people who have sufficient cash reserves. While I philosophically disagree with the premise of the MMA, you get it done your way, I'll get it done mine...let;s just get it done.

SEP

2007

yeah this MMA is just showing up in Atlanta. I just saw the presentation yesterday as a realtor. I don't think its a scam but I do not think its for everyone and probably not most people. I think it would be risky for most regular people who don't understand how money works. I think you either have to be ok with someone(in this case a software system) telling you how to spend your monthly income or you need to understand how money works. In either case I'd say those people are the minority in our society and probably don't need this system in the 1st place. The problem I see is that the tool only suggests what u should do it doesn't do it for u, which is going to eliminate most people right there. People in general just aren't that disciplined. I believe that without giving thing the education on how money works, they will probably be in the same position as before they had this software. That is unless, they already have some level of discipline to start with.

Keith - I've been researching these and spoke to someone yesterday. You post by Jaime bothers me based on the undisclosed relationship.

What I'm being told is that 90% of the clients who use this program exceed expectations significantly and 8% are right on target. Only 2% don't follow the plan.

Those are good statistics. I still need to do more research - fast rising solutions in times of market stress just require good research!

OCT

2007

Saw a presentation today. It was being held by an agent in my office and I was skeptical right from the beginning. I'll go with my gut feeling which has done a good job for me in the past. One of the other agents expressed some interest so I took it upon myself to do some checking on the Web this evening. I haven't seen one thing that has changed my mind only things that reinforce my first reaction especially after reading the following link (guess you'll have to copy and paste...it is sure worth it)

http://www.butterhomes.com/blog/index.php/mortgage-accelerator-under-fire-australian-securities-and-investments-commission-taking-action-against-mortgage-brokers

The title is:

Mortgage Accelerator under fire; Australian Securities and Investments Commission taking action against mortgage brokers.

Keith...when I try to go to http://www.loanacceleration.net/ I don't have any luck. It just tells me Internet Explorer cannot find it.

Kathleen, the link that you share is a politically based "consumer advocate" - not govenrment based at all. I'm still trying to sort through all the rhetoric but if you really look at the systems, they make sense. Major lending institutions have a lot to lose on this issue, so one has to question the "research". JMHO.

OCT

2007

I have proven on other sites that all mortgage acceleration programs require you to add more money each month, above the amount you pay for your mortgage, in order to pay down the principal. There is no free lunch.

Yes, mortgage acceleration requires discipline to be able to reduce your consumption so that you free up "discretionary income". Shuffling money in and out of a HELOC does not produce the result that everyone claims, regardless of the product. It it is the extra money, pure and simple.

I have never seen any MMA agent post a single worked-out example showing how they are able to make money using the HELOC. The only value that MMA and similar products provide is the ability to concretely see the savings one is getting for each dollar used for paydown, as well as to be able to see what one is spending.

DEC

2007

Hello,

Does anybody have any updated info on MMA ( Helocs)? Are they a scam ? I have seen several presentations but not sure if I want to go with plan, which is spending $3500 on a software. The concept looks like it would work. But I would like to hear from people that is currently doing it. NOT AGENTS......PLEASE

Thank You

Jimmy and MMA Heloc, mathematically the concept does work, that's proven. The question is not and should not be, do MMA's work. The right question to ask is, are they right for YOU!!.

For the MMA to work, you must:

1. Spend less than you make,

2. Be willing to invest 15 minutes a week or 1 hour once a month on your finances.

3. Not be prone to running up lots of credit card debt.

4. Have enough equity in your home to be able to get a line a credit.

There are also a plethora of questions that should be asked regarding your financial plans and goals before anyone decides to move forward with any mortgage acceleration program!

Theoretically, a consumer can do the exact same thing without purchasing the software. The difference is that do it yourselfers don't get a road-map. Basically, the software provides a road-map as to the best timing for transferring money from your primary mortgage into your HELOC.

Of course, you MUST spend less than you make for the MMA to work. You cannot expect to spend more than you make and ever be out of debt. If someone purchases the software thinking that it's going to be a magic bullet and defy the laws of math, well they are fooling themselves.

The most controversial product is UFirst, this is because it allows anyone to sell the product. I personally like the product, but I've recently been introduced to a different MMA product that has a better budgeting and money management tool. I'm in the process of doing my due diligence on this product.

Jimmie - this statement makes no sense "I have never seen any MMA agent post a single worked-out example showing how they are able to make money using the HELOC." Agents don't make money from your using the HELOC??? If you'd care to email me clarifying your question I'll be happy to answer your question.

"The only value that MMA and similar products provide is the ability to concretely see the savings one is getting for each dollar used for paydown, as well as to be able to see what one is spending." Seems to me that this is a huge advantage, the budgeting tool and scenario projection are also also very valuable tools.

If you are going to consider an MMA, make sure you are dealing someone who is willing to ask the hard questions, someone who has more than one alternative for not only mortgage acceleration but mortgage planning and debt elimination in general. It's extremely important that the person you work with will take the time to evaluate your individual goals and needs, intelligently answer your questions and provide options for you.

My two cents:

The MMA is over-hyped, over-priced and simply not the best strategy for consumers. Paying off your mortgage is overrated. "Owning" your home simply means that you have control over its disposition. We teach our clients that control over assets is what makes someone wealthy. I'd much rather see a client leverage their home equity to receive maximum tax benefit, protection against market losses and acheive significant liquidity.

In order for the MMA to work, you must have a consumers disciplined enough to save. If they're disciplined enough to save money, then an MMA is not as good as taking a big, long-term mortgage (See Ric Edelman) and investing their "disposable income" in a balanced portfolio.

We've done the math. In fact, we've spent MANY hours customizing our own software (not for sale at any price, thank you) showing our clients and financial planner, insurance advisor and CPA partners the liquidity and net worth benefit of the saving versus principal acceleration methods.

That's my two cents. Of course, it's true that I don't have any original ideas, this method is the one that I'm currently supporting, based on my review of a lot of available data in the marketplace.

My two cents:

That's my two cents. Of course, it's true that I don't have any original ideas, this method is the one that I'm currently supporting, based on my review of a lot of available data in the marketplace.

Saving vs Equity accleration works for clients that have the time. For late starters the MMA is an excellent way to acheive both. Wealth is created through one of three mechanisims: Time, Money or Personal Effort. Mortgage Accelleration shortens time and allows for harvesting of equity for investment vehicles. It's an excellent tool, especially when used in conjunction with other mortage planning vehicles.

DEC

2007

Michael P. hit the nail on the head. So many of you are selling to others to pay off your house as soon as. You aren't letting your money work for you in the best capacity. I hate to sound rude and I am not going to point fingers, but some of you are brain washed with these products. I could sit down with you and show how you can leverage your house by having a mortgage, even maxed out, and still make more money.

As Michael, I have also run the numbers vs these accelerator programs. Sure, you can go back and either tap into your home for money or write a check in regards to the MMA program.

Kate, sorry to single you out, but you are so into this program. Yes, the MMA can work for you, but that's it. Is it the best possible way, no. Brian Brady and I were having this conversation last night. He worked in Securities, financial planning... I have talked to big time financial planners and such. Paying off your house only gives you security. Taking that extra money and placing it in other vehicles that give you a better rate of return is the better choice. Allowing your house to work for you, as you make your payments and have interest write-offs. Besides, I could take that extra money that it cost me to do the MMA and invest it.... and be ahead. You need to understand medium risk and high risk stocks and other portfolios to actually give the right advice in what you are talking about. This has been proven....

Lastly.... you have to be very disciplined to keep up with the MMA's of the world to make it work anyhow. And I think you contradicted yourself when you said... 3. Not be prone to running up lots of credit card debt.

If you think about it, that is the only reason why these accelerator programs work better, if you have more debt, credit cards and car loans. If you just have a mortgage, the best way is to pay it down yourself and not through any accelerator program. I have proven this.... so I am confused by your statements and how you look at this on a whole.

Overall, so many people get way too caught up by plugging the numbers into the system, seeing how quickly the MMA program works. But you keep forgetting so many of the basic principals. Besides, those with great credit scores aren't the ones that typically need saved. Those with average or below, are the ones with money management problems and can't get a heloc. I could take someone that is well off, and invest their money in stocks and other vehicles and make more money, by leveraging their property. This is a proven fact and is lost with these accelerator programs. Sure, this is my .02, but there is a documented history in regards to this.... Over a 15 yr period, I could make the consumer a lot more money by investing it other than their house. It's called a retirement plan. Your house is not suppose to be your retirement plan. It's an investment that you need to allow it to work for you. Not allowing you to work for it. By paying it down quickly, you are working for it. If you had a $500,000 house and had to make an extra $2,000 a month payment to pay if off in 15 yrs.... I could take that same amount of extra money and easily double your $500,000 mortgage. So my million dollars is worth more than your $500,000 house, with a tax write-off. And just doubling it is a safe statement. This is the point that so many of us are trying to make.

Jeff, you are not listening to what I am saying. You and Brian and some of the others are so into "not liking" the MMA that you are failing to see a powerful benefit of using the MMA process.

I am not "totally into" the product, I just see it differently, and I choose to play devils advocate because I know from personal experience that many people who argue against it have an alternative motive in favor of what ever they are selling.

There are holes that can be shot in every single product that's on the market from Interest Only Loans to option arms to conventional mortgages. There is no one single solution that works for every client.

The message that I am trying to communicate is very simple.

If you are interested in the MMA, make sure that you go to a professional that will look at ALL the options available to you. This should looking at the MMA, a refinance, to retirement investment/savings, to using a Third Party Administrator. When a client comes to me I run three or four different scenarios, only one of which is the MMA. There have been instances where the MMA wins, based on that clients needs and goals.

As professionals we should not be pre-disposed to any one product or any one solution. We should certainly not be pre-disposed to the product or solution that puts the most money in our pockets. When a client comes to me they get a recommendation that is best for the client, period, even if that means sending them elsewhere.

For someone who has not saved for retirement, for someone who has not saved for college, for someone who wants to generate capital to buy a business or invest in real estate and has no other way to generate the capital the MMA is an excellent solution, especially if they have little or no debt. The MMA helps to create assessable liquidity and capital which few other methods do.

I repeat, there are only three ways to harness the power of money. Time (interest), Money (capital), or Personal Energy (wages).

In the absence of Time, the MMA is a very powerful solution, especially in a market appreciation is declining or stagnent. I am not married to the MMA and it's not for everyone, but it has it's place in the pool of client solutions.

For that reason alone I choose to play devils advocate!!

JUL

2008

Want a math based analysis of United First Financial / Money Merge / Jubilee Project? See this link http://www.fatwallet.com/forums/topic_view.php?catid=52&threadid=767134&start=0

In every case, each real world example of using this system loses to simple, time proven, time tested, simple prepayments. The folks there make no money, whatever you do. So, do yourself a favor, and do your homework before you spend $3500

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