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Money Merge Accounts: Abusing Einstein’s Quotes

Money Merge Accounts: Misuse of Einstein's Quotes I have seen this repeatedly in marketing materials from United First Financial (UFirst Financial/UFF) and their agents, another example of the misleading material provided to sell their product, the Money Merge account (MMA). Throughout the history of this company, they have provided nothing but false and/or misleading statements into their advertisements, many of which I have already exposed here and in my previous ActiveRain blogging.

Now, let's look at another one, this time using a quote by one of the foremost figures of intelligence in history, Albert Einstein. The quote that they use is:

"Insanity means doing the same thing over and over again and expecting different result" (Albert Einstein(?) - It is believed that this quote was actually misattributed to Einstein and is actually a quote of Rita Mae Brown)

The truth is, by adding this quote to their advertising, they are even telling you that there product sucks in reality. While they will misuse the quote to bring justification to their product, by saying that carrying a mortgage is insane (in essence), reality is completely different. One could argue that the true insanity is believing that paying off your mortgage in the first place since that is what has been done over and over again and rarely brought wealth to those whom have done so.

In fact, now that boomers are hitting retirement, we can see the gruesome reality that many are failing to be in a position to retire since they had focused a lot on paying off their mortgages and pensions of old are no longer to be found, which is what our forefathers relied upon. So, the argument that paying off your mortgage, especially through mortgage acceleration programs is the really insane choice.

Now, since they are bringing Albert Einstein's quotes into their advertising, let's look at another applicable quote Mr. Einstein did as it explains why the Money Merge Account is still being sold, and the agents are making money selling a scam product...

“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.” (Albert Einstein)

If they doesn't explain it, the latter may certainly be applicable, sorry.

Posted by Florida's #1 Mortgage Planner on 01/28/2009 09:27 AM

Comments (38)

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38 Comments on Money Merge Accounts: Abusing Einstein’s Quotes

JAN

What I find strange is the almost 'cult like' following of this 'concept' by very few.

The MLM sales people must do a good job in the brainwashing meetings.

Wow, that was a pretty harsh post...especially to me since I am currently an Independent Agent of United First Financial. I do respect your opinion as I don't expect everyone to agree with or understand everthing about this program. But what I find insane is the thought that it takes until retirement age to actually pay off a mortgage, especially if you add a couple of refinances in there. Not to mention that you will eventually pay for your home more that two times over if you continue to pay over the life of your loan which is usually 30years...yet I don't hear anyone complaining about that! I appreciate a company finding a way for people to actually save money on interest...again this program may not be for everyone but for those who choose to use it WILL reap the benefits of what the company guarantees. I would deeply encourage to you and anyone who reads this to purchase the February 2009 issue of Success From Home Magazine. United First Financial is the feature of the entire magazine. Also check out the January/February 2008 issue of Mortgage Planner where we are also featured. So I will end by saying, don't let one opinion guide your final decision about anything. Always take the time to investigate things for yourself. Also, can any of us say that we have always had good things said about us while we've been in business? This is a nationally based company that receives a lot of flack but also receives a lot of praise. You have to also remember that if someone does have something to say about you...consider the source!!! Visit www.u1stfinancial.com

Robert,

Money Merge is the perfect Con! The numbers work. It's the realty that fails! It's promoters also never mention the huge risk!

Those that market it seem to fall into one of several groups:

Crooked!

Naively crooked!

Stupidly crooked!

This abomination is a moral sin.

But, it does prove the wisdom of several quoats two that come to mind.

"A fool and his money are soon parted." Thomas Tusser 1524-1580

"There is a sucker born every minute." P. T. Barnum 1810-1891

"Harsh?" Like charging $3,500 or so for what can be done on the spread sheet that came with your computer?

"Harsh?"Like charging for the HELOC that not only isn't needed, but also extremely risky?

"Harsh?" Like eliminating liquidity in favor of a line of credit that can't be depended on.

I don't know the lady commentor or her company, but I did follow her link,. "Harsh" is misleading double speak, like that found in their "FAQ" section. Question one:

"Q. What is the Money Merge Account program?

A. The Money Merge Account program is a powerful tool that enables homeowners to pay off their mortgage in as little as 1/ 2 to 1/3 the time, without refinancing their existing mortgage or increasing minimum required monthly payments..."
They must know that people are going to read that as [without increasing the monthly payment.]

"Figures don't lie, but liars figure!" Samuel Clemens Yes, Mark Twain 1835-1910

"God protect us from those that would trade our security for a quick commissions!" William J Archambault Jr

This is of course just one man's opinion.

Bill

Tom - The majority of these sellers, whether mortgage pros or not, lack a full understand of how money works and, dare I say, even how their product works. They learn the scripts and sell the product with the belief that it is a great program which they have been led to think. Reality is quite a bit different as I have proved this program to be more costly and do more harm than it is worth in numerous posts.

Christina - I respect your opinions as well, but reality is reality and facts are facts. As I have shown countless times, the real savings is not derived from the software, rather the adding of principal payments through the use of any, if not all, discretionary income. The statements surrounding these programs are false and/or misleading as I have shown time and again.

I am led to believe you are unaware of other strategies involved and believe that a mortgage is a liability (I will be posting about this belief soon). Other strategies, as I have proved also, will place the homeowner in a position to pay off their mortgage even faster than any mortgage acceleration program could, not to mention leaving them in "liquid" position and increasing rates of return. Our forefathers grew up thinking that a mortgage needed to be paid off, and in their time, it did. But they also had pensions they could rely on, as well as a healthy social security system, neither of which are available today, making paying off one's mortgage a lot further down the financial priority list.

You mention the Success from Home Magazine and even Mortgage Planner Magazine. I am surprised you didn't mention the write-ups in Broker-Banker or the fact UFF won Entrepreneur of the Year (note they didn't win product of the year). The truth is that praise can be bought, whereas flack comes at no expense. I subscribe to Mortgage Planner Magazine and that UFF article reads more than an advertorial than an actual article endorsing the product. Broker-Banker is run by a UFF agent, so it goes without saying why there are endorsements of the Money Merge Account in that magazine.

Now, I admire you for believing in a product and wanting to help people. However, this product unfortunately is not as beneficial as their claims and in my opinion is a complete waste of money. As for the financial concepts surrounding keeping one's mortgage, rest assured that I am not the only who believes in this as the majority of the wealthy, last I heard was about 80%, maintain their mortgage even though they could write it off with the stroke of a pen.

May I suggest reading Ric Edelman's, Ordinary People, Extraordinary Results, where surveys of his own clients resulted in him finding out that the #1 reason the 5,000 surveyed went from being ordinary to wealthy was using the mortgage to create wealth.

Bill - Glad to see you adding your thoughts on the subject as I figured they would be good ones. Some great quotes I might add and thanks for touching on several key points, especially showing how misleading they are right from the start of their "FAQs".

Robert, Thank you again for exposing U1st Financial. It disgusts me that very little haa been done to expose these snake oil sales people.

Christina - here is a good example of how paying down your mortgage does not help you in today's turbulent market. Just received a phone call from a from one of my parents friends. He's a bishop of a LDS ward in Idaho and one of his flock is in big trouble. I won't go into too many details about how and why he's in trouble, but let's just say that his industry took a beating, and his income is not high enough to support his current mortgage. What he admitted to me in regards to his present situation says millions about the UFF strategy. He sold one of his real estate properties in the beginning of 2008. He knew things were going to get tight, but little did he know how tight. So instead of holding onto the cash from this sale, he put's most of it into his current primary mortgage and creates another 100k in equity (at least that's what he was thinking). Several months later, as gas prices go through the roof (his business is sensitive to this fact), and as property values plummet, his bank then decides to cancel his HELOC. There was no balance in the HELOC, but the bank didn't care, they just didn't like the fact he was in a declining market. So now his income is down, he doesn't have access to any of his equity, and now he can't make his primary mortgage payment (which was originated at a much higher balance).

So now the guy is 60 days late, the bank wants to foreclose because there probably really is $200k in equity in his property, and he's in a pickle. Right now his only option is bankruptcy and getting a good attorney to forestall the bankruptcy because the lender wants the property! So without reserves, without the ability to tap the equity, this guy is screwed!

I live in the same town as the corporate HQ for United First Financial. I know a number of the head guys at this firm, and believe me it's all about the money they're making selling this program. The problem is they parade the two or three people this program helps, but they can do little to help the people that talk to me everyday about how they should have listened to me and kept a reserve in a separate account or even under the bed!

And this new strategy of creating personal lines of credit at the bank is even more ridiculous then the HELOC. For one, most banks are not in the habit of just giving money away and they're going to offer these PLC's at much higher rates then the original HELOC's, but there is very little guarantee that you'll even qualify not too mention the ability of the bank to shut it down anytime they want. Furthermore, those advocating you use the checking account are even more crazy! Now you have a software program telling you when to empty all your reserves into your mortgage.

I personally agree with Robert Ashby in regards to keeping the mortgage for many reasons. However, if your so hell bent on paying off the mortgage then you can find FREE mortgage calculators on line that you can plug in your information and they'll let you know for FREE how much you need to pay EXTRA each month to payoff the mortgage early.....amazing that you can find these tools for FREE. My only caveat is that if you are hell bent on paying down the mortgage, make sure you sock away 6 months of income please!!! A reserve account is much more important and EATING is more important then some fictional day that you'll pay your mortgage off. Reality is that paying off mortgages is only relevant for those who are deciding to cash out their retirement account to pay off the mortgage, or if your freeing up cash flow on an investment home, and even then I get together with their financial experts (CPA,FP,Lawyer) and we discuss the ramifications of paying it off early.

The Susi Orman/United First "We think that mortgages are the devil" crowd have no business giving financial advice to home owners! But unfortuantely there are people I talk to each day that buy into these fairy tales. Please if your thinking about jumping in one of these deals, PLEASE talk to Robert or myself first!!!!

Robert.... William's comment... BINGO... this is what Bill said...

"Money Merge is the perfect Con! The numbers work. It's the realty that fails! It's promoters also never mention the huge risk!"

PEOPLE….. it’s not that the money accelerator programs don’t work, it’s how they are being sold. I can show you that you don’t need to spend $3,500 for a program, that you can do yourself.

My point, as what William and a few others have said and will say… “We are in a troubled economy, rich or poor, we just don’t know what is around the corner. Karl’s example is perfect… his friend is now in troubled times…. But has no money available because it’s in his house. No matter how you slice and dice the UFF program or any of the ones like their kind, it still costs you extra money monthly for the end result. BOTTOM line… let’s stop kidding ourselves and stop selling the “free” feature… or “there are no changes in your monthly output” that’s BS… you still need to spend more than your regular monthly mortgage payment. It’s irrelevant to where and or how it gets placed. It’s extra money and cash is king now.

Make your house work for you, don’t work for your house. Save your money in easy to reach places for such emergencies. Why do you need to pay off your house in 12 yrs when you might not be there for more than 6 yrs… you can’t go up to your house and say…”house, please give me my money back in 24 hours”

Jeff Belonger

Nicely done Robert. I remember the first time I heard about MMA's. I was speaking to a group of real estate investors. The speaker before me was an accountant and the speaker after me was touting the benefits of MMA's. I stood next to the accountant as we listened in absolute disbelief to the MMA guy. It's a preposterous idea and as Karl pointed out, if you are hell bent on paying your mortgage off early there are numerous FREE tools available to help guide to doing so. My personal favorite is setting up bi-weekly payments. NOT paying a company to do it for you. Just doing it yourself. But I digress. After that meeting I gathered information about the "program" and shared it with my personal accountant, my corporate accountant and my two financial planners. They all howled at the thought that someone could be duped into paying for such a thing.

Success from Home Magazine? Are you kidding? That is NOT a news publication. It is like an advertisement for work at home people.

I call it like I see it... this is nothing more than a bunch of MLM people selling something they do not fully understand.

Money Merge is the perfect Con! The numbers work. It's the realty that fails! It's promoters also never mention the huge risk! William J Archambault Jr (The Real Estate Investment Institute )

I think the above says it all!! It is Snake Oil people!!!

Gary - It seems that every now and then I come across another one of their agents that just inspires me to write about UFF and the Money Merge Account again as they just never seem to go away. Whether it is snake oil or simply a cult, Karl's example shows why people need to be afraid of them

Karl - What an amazing example of why people need to get their head's out of their butts and learn how money truly works in today's environment. Suze Orman style advice may work to keep your head just above water, but financial freedom comes faster to those who throw her overboard.

Jeff - Is your computer on drugs? Or are you just being colorful? You are right in that the program works to some extent, which I have even stated before. The problem is the BS surrounding their advertising (what inspired this post), not to mention the fact many other startegies are much better and that the program very rarely saves more than it costs from the actual concept, is what needs to be addressed.

Beth - Anyone who works the numbers, and especially those who understand other equity management strategies, can clearly see how these things cost more than they save and are nothing more than a way for their agents to profit of unsuspecting homeowners.

Tom - I haven't read Success from Home, but I figured it was another advertorial style get up. Personally, my travel business is in an MLM organization, but I don't buy into to the MLM BS or force anyone else to. For me, the business model works best for what I want to do with it. For others, the MLM setup does the same. But for most MLMers, they will sell their soul to get you to sign on and/or get the sale.

William A. even made this statement....

""Q. What is the Money Merge Account program?

A. The Money Merge Account program is a powerful tool that enables homeowners to pay off their mortgage in as little as 1/ 2 to 1/3 the time, without refinancing their existing mortgage or increasing minimum required monthly payments..."
They must know that people are going to read that as [without increasing the monthly payment.] "

Again, BINGO... you read that as not making an extra mortgage payment. There is a woman in my office that sells this program and 3 times now, she tells me there is nothing else monthly, but I still need to use my pay check to make this work. AGAIN... people, you still need to spend more than your regular monthly mortgage payment. Bottom line.

Example : if your mortgage payment is $2,500 a month. UFF is then saying that is all that I am putting out of my pocket. So are they telling me that I can still spend $2,500 a month, nothing more out of my pay check, and that I will knock 15 years off my term? Holy _____... that would be great.

But in reality, that's not the case. It's just money spent some where else. It would take me an additional $1,000 a month to knock off 17 years...... okay, so it goes into another account to pay other bills, reducing my interest. You still need to spend that extra money no matter how you slice and dice it. If I got that back at the end of the month, how would you expect for your principal to be paid down quicker? PEOPLE... common sense.. sorry, but as some have said, these UFF agents are brainwashed. This same method use to be called the Australian mortgage. Look it up... it's basically forbidden in Australia now. I wonder why? Give this program another year, when word gets out. You will always find a few people that swear this works... you will find someone that says anything works at any time....

Jeff Belonger

Jeff - I am glad you are no longer in technicolor. Thanks for adding more and driving home your point.

I am amazed how heated some of this gets. I am not a part UFF, but to trash the program like this is a waste of time.

Robert - I will readily admit that I don't know enough about MMA's to pass judgment here, but the comments are fascinating.

This program does bring out a lot of emotion, but for good reason. It makes me as mad as when I saw loan officers with no clue selling Option ARMs to people about to retire, buying their first home on a bidget, etc. They had no business getting a risky product that they did not understand! Now I see similiar sales pitches on this program from equally unskilled "sales people".

Im shocked that people are willing to pay $3500 for this dubious advice and "software" when they can get it for free. Whether its good or bad, thats just a scam.

Nice post. This thing really sucks. Surely people see that. The funny thing is you can find free software on the net that does the exact same thing.

JAN

it is sad when someone thinks they are going to pay off their house (early) only to find out that the big priciple reduction payment they just made is money in the wind becuase now they cant make their payment and the bank is gonna foreclose. i agree with a previous poster, before you even consider making additional principal reduction payment you better be maxing out your 401k provided your employer matches, cause thats free money. then put some cash in the bank for a rainy day. its nice to see some fellow loan officers/brokers exposing the mma for what it realy is; just another sales pitch.

What are the facts on money merge accounts? Either it works or it does not. Can someone crunch out some numbers to support or refute its claim to pay down the mortgage in a accelarated time frame. 3500.00 could be a lot of money to invest and not use the tool (like a diet plan or gym membership) or it could be an inexpensive investment if it utilized for its intended purpose(like a diet plan or gym membership). I am open to both sides of issue. Thank you in advance for any following posts.

the facts are the only way to pay off your loan early is by making principal reduction payments. does it work? yes. is it worth it? no, not for most people.

I recently became expose to the MMA and studied up on it.

1) You can run the program without the use of a HELOC now, which makes sense in a declining market where people can't get HELOCs.

2) Also what hasn't been mentioned is that the MMA takes into account all your debts and interest, not just the mortgage. Maybe having a mortgage has some benefits, but what about cars and credit cards?

3) Lastly, absolutely reserves are important. Everyone should establish an emergency fund. The program works off your net income, meaning you can decide what you consider discretionary income. Whether its a $1000 or $50, you decide and the program calculates based off that. That gives everyone the opportunity to establish reserves.

Personally, I do not see why this program creates such anger on blogs and forums. If there is a simple system that people can use to pay down there debt, why the anger? I believe comments are you can do it yourself, which is valid. You can lose weight by eating right and exercising, but how many diet plans are being sold every day? Systems work - people fail.

This software appears to be an easy to use system, the average person can log in, follow the instructions on the screen, and eliminate debt. Will the average person sit down with a spreadsheet and calculator at the end of the month to strategize how to become debt free? If that were the case, there would be less "short sale specialist" and "loan modification" advertisements around town.

Just my two cents. Have a great day!

I feel like I should say something and I always question peoples motives in speaking out so harshly about a product. I see some people (like on this blog) going to the ends of the earth to debunk this system and prove it to be a fallacy.

While I did sign up as a U-1st agent, I am really not active with it, nor do I feel any attachment to it and I view it as just 'another product out there'. I feel I am pretty neutral and am open to peoples opinions. When it comes to financial advice, everyone seems to have a different opinion. I am sure there are many that think Suze Orman and Jim Cramer are out to lunch as well (I mean, it does seem like Jiim my have taken a blow to his head at one point in his life, but I think he still knows what he is talking about).

First of all, their claim is that you don't have to increase your regular SCHEDULED mortgage payment. And you don't. You do have to make extra payments, which come from your discretionary income. As the previous poster said, YOU set the amount you want the software to work from. The whole purpose is that it makes use of your stagnant money, doing something with it as opposed to letting it sit idle in a bank account.

Can you do this yourself with a spreadsheet like many say? I think so. If you have the discipline to do so. Will you get the same results? I think you can come close. My point is that if you feel YOU can do this with a simple spreadsheet, then go ahead and do it. This product is not for you. The product is for people who DONT have the discipline and/or WON'T do it on their own.

I really don't post on blogs too often, as I am pretty busy with everything else, but I felt the need to comment here. I really think it is uncalled for to call a product a scam when they truly don't understand how it works and anyone who spends THIS much time vehemently lashing out at a product has an ulterior motive.

While the numbers might work under the MMA what is never discussed is this...

... is this the best thing to do with your money?

The fact of the matter is this... Mortgage money is STILL the cheapest money you can get. Mortgage interest is STILL one of the few tax deductions the average W-2 employee has.

My problem with the MMA (a side from the fact that I don't like MLMs) is that the average person has more important things to do with their extra discretionary income besides paying down their mortgage. People need to start and constantly contribute to retirement funds, college funds, emergency nest eggs, pay down their credit cards, etc etc etc. Just plain putting the extra in the bank. You never know when an emergency or opportunity will arise when you need that cash. If all your descretionary cash is in your house, its neither quick, easy, or free to get it out. Can you guaranty you won't need a lump of cash in the next 8 to 14 years???? Have you looked at the car financing business lately? How old is your car?

Socking money into your home will reduce your mortgage and build your equity. But I explained it to a client of mine who wanted to do the MMA... Equity in your home is a great thing but it is not that easy to get at it. You can go to the super market and buy $100 worth groceries and then give the cashier a gold brick. You know the value of the brick far exceeds the purchase but the cashier won't know what to do with it.

This was 2 years ago. Now with lines of credit harder to come by and home values falling faster than the equity your building the advise becomes even more valuable.

MMAs might work by the numbers, its just not the best solution for most people.

Alot of arguing, thrusts and parlays but your point is not well made. You want to explain what to 'Joe Six Pack'? It's not clear. I just wrote about these loans with a recent book review that I did on 'Debt Cures'.

Jeff is using HTML not some secret hallucinogenic.

I will agree with some of what you say. I am not a big fan of MLM's either, but in a sense, every corporate structure is a pyramid. I wouldn't necessarily say that paying off a mortgage isn't the best solution for MOST people, but I would say for a lot. If you are currently paying 6% interest on your mortgage, then eliminating this debt (or any money you put towards it) is equal to saving 6% interest. Earning 6% on an investment or not having to pay 6% to the bank is a wash. Let's say you could have your mortgage paid off in 10 years. How much interest have you saved? Now you can take that money and invest it for retirement, you have a house that is paid off and you don't have a big mortgage hanging over your head. I think the lack of a mortgage would feel pretty darn good.

True, your mortgage payment one of the few tax deductions that the average W2 earner has, but is it really worth to pay this interest simply for a tax deduction? I am not an accountant, so that is more of a rhetorical question.

I know it is a stick situation with home values right now in the United States, but it isn't going to be this way forever. I can't comment on how hard it is to get banks to lend money for mortgages in the US right now, as I am not a part of that economy. However, up here in Canada, people can EASILY refinance their homes at very little cost if they run into difficulty down the road. So throwing your money away to the bank isn't really what you are doing. You can re-borrow it if the need arises. Even if it costs them three or four thousand to do so, look how much they would have saved in interest over that time. FAR more than the refinancing cost.

I don't think the U First program is for everyone and I do think there are better investments for a lot of people, but I don't think slandering the program is justified. There are a lot of people out there who are not very good with their money and something like this could really help them out, and I think it is these people that this program is well suited to.

As far as how old my car is, I am really not sure how that comes into play here, but it is a 2005, and yes, I know the car financing business is having a tough time. I am going to be purchasing a new Lexus this weekend, so we will soon see just how bad they want to make a deal :)

Citycan & Devin...

The answer to your question is what Citycan sited in his post...Discipline! The false premise is that the borrower just has to be disciplined and they could follow the same program with a basic excel spreadsheet. Yes, that maybe true, but the UFF and other programs like it, pray on the "little pain" idea that the client can blissfully live their current lifestyle. The problem is that most people who look at this program DO NOT qualify for the program. They don't have discretionary income, because they SPEND IT ALL!! Furthermore life can often cause best laid plans to be set aside due to emergency or job loss.

The problem is that UFF agents are like self proclaimed nutrition experts. Dispensing "cures" without a true understanding of their clients spending habits, savings IQ, or other factors. The idea that a computer can simply make your life better by telling you how to pay your deals is naive. Yes, I know the software is set up so that you can make changes, but the reality is that most people are not good at following these type of plans. You don't believe me, then open your eyes and look at the diet industry. 95% of the people who go on diets fail! Why, because they can't follow the stupid plans. It's not that the diets are all scams, it's because people are human and will fail.

So what's the difference, what's the harm in paying $3500 and hoping your financial ills will be cured by some computer software. The problem is that it gives people a false sense of reality. The problem is most UFF agents do not push the client into developing a savings or reserve account. The problem is that most UFF agents are not properly trained in tax and retirement planning. The problem is that most UFF agents are in it for one reason other then the one they pat themselves on the back for each night, and that's the money-honey!

There are some expections, Citycan, you maybe one of them. But the problem is a majority of the UFF agents have not paid the price! Dispensing long term financial management expertise is dangerous folks, and the EXPERTS are the ones whom should be doing it. I NEVER dispense tax advice or retirement advice to my clients, I may offer them options in which to manage their mortgage, but it's not a program they pay $3500 dollars for. If they want TRUE financial advice I refer them to trusted financial advisers (CPA, CFP's)

The debate in regards to paying off the mortgage or keeping it for tax reasons may rage for the next 10 years. The reality is that as financial professionals, we should strive to DO NO HARM. If your pushing your client into an option arm, or one of these mortgage merge accounts, are you absolutely sure your not pushing them into a harmful situation.

The problem friends is that the example I used in my first response to Roberts blog is true. There is harm being done through the changes in the market and economy. The MMA account has contributed to a number of now new clients financial woes. Sure they're ultimately responsible for their lack of control when it comes to finances, but the Mortgage Merge account has not helped them get any better.

One other thing for you Mortgage Merge Advocates. This was originally spun as the Australian mortgage system, the reality is that is as ridiculous as they way the program is pitched today. It's true that this program developed in Australia in the late 80's and early 90's, but the sad fact is that today these purveyors of this program are being pursued by government investigators as scams. I'll make sure and publish a number of these reports in a future blog I'm writing about this very subject.

Can someone please give us a list of all the free softwares, spreadsheets, or calcualtors that will do what UFF does? I am not a salesman for UFF but I have seen the software and it acts like a tool to make people accountable to a budget, see the impact of every spending decision, in addition to accelerating the amortization schedule on the 1st mtg.. As far as risk, I do agree it is usually not a great idea to dump all of our discretionary income into our homes while they contnue to depreciate. Often makes more sense to max out 401K...but difficult to suggest in this market. However, there is little risk in using a HELOC for this prorgam...in all the scenarios UFF proposes that I have ever seen (about 20), not one ever runs up the balance on a HELOC by more than about $10,000 at any one given time. The avg. daily balance is around $4,000 or less.....which is the amount you pay interest on. If the HELOC rate is 4% or 7%, it is not hugely significant ($12 difference) and is offset by the significant acceleration of the amortizartion schedule. This is done by advancing a much larger amount to the 1st mtg. principle compared to sending in tiny amouts each month.

I guess some people see $3,500 as a drop in the bucket to doing a full on refi into a 15 or 20 year loan and locking themsleves into a much higher payment and increasing their loan balance by $5,000 to $9,000 (depending on loan amounts, impounds, and points).

Again, I'm not a UFF agent or an agent of any of the othr knock offs...and I agree $3,500 is a lot for a budgetary software. I imagine the avg person would have no clue how to set up their own spread sheet to accomplish this......can you see the avg. truck driver or waitress punching out a full on spreadsheet to accomplish this? Most avg. working americans don't even know what Excel is....do they?

Robert, I think you should create a spreadsheet that does what UFF does, charge $20, and shut UFF down, or maybe you have tried that already...not sure.

WOW!!! I was the second person to comment on this blog and I'm just returning today. It's quite interesting to see this has stirred up such a heated discussion. I've taken the time to read all of the comments and I truly respect everyone's opinion. I will say I don't appreciate the outright insults and name calling that came out of this discussion. We are all professionals and to learn to agree to disagree in a respectable manner would be the professional way to be. Unfortunately it didn't happen that way. Anyhow...my personal closing argument about UFF is as follows. Everyone has the right to make their own informed decision. There are many programs and products out there that claim to do what our software does but it is up to the consumer what product they choose. A lexus and a toyota will essentially do the same thing but it is up to the customer to choose which brand of a product they want to buy...it's called competition. I do agree that some agents are just cut throat sales people that are just looking for a quick commission. But to categorize all agents as being that way isn't fair if you don't know them personally. I am not just a UFF agent, I also use the product which is what has led me to sale the product. I have my own testimony. Could my debt have been paid with out this software, probably. But until I bought this product nothing was being done about my debt after trying to find someone or something to show me how to get it paid down faster and being unsuccessful. I am very happy with my purchase and don't regret it one bit. As far as the argument about whether or not it's beneficial to pay off a mortgage, again that's based on each individual person. I personally don't want to pay a mortgage for the next 30 years, I want to rid myself of this hassle. I do agree that know one should put all of their extra money into their mortgage until they have no emergency reserves to fall back on. I don't even do that while I'm on the program. I am not a financial planner or CPA, but as a general user of the product I will tell potential buyers to not put all of their money into the program, to save some for a rainy day. So again if this program isn't for you then don't use it, but don't knock the next person if they like the product. And remember, this product can be used over and over again for a lifetime. It doesn't stop working after your first mortgage, car, credit card, etc. has been paid off. You can continue to use it as your own personal financial tool.

Christina - I'm pretty sure I didn't paint all UFF agents with the same brush, but tell me has UFF offered any of the agents tax planning or financial planning training? Has anyone been required at UFF to be "qualified" with a license of any type? The answer to that was no when I first had my run in with the company, and I'm pretty sure it hasn't changed much in the last year. I'm glad this system works for you and I know from personal experience that often we become passionate about idea's and products that work for us. But you've failed to address the issue regarding professional competency in regards to presenting this to a potential client. The problem is it's no different then me dispensing medical advice, even though I'm well read and have spent years reading about medicine on the web.

Or perhaps you've taught yourself the nuances of CAD (an engineering and design software) and now you think your qualified to design homes and buildings. It's what you don't know that is going to get you sued Christina, that's why I'd leave it to the professionals. The next few years are going to be a bloodbath for anyone that has proclaimed themselves as a financial expert. I'm just warning you that this program may have been good for you, but it's not good for everyone and how are you sure that everyone dispensing the UFF message are qualified to do so?

Brad - the HELOC's are the primary reason for the problem. Now that that source for the mortgage merge account is gone they are using checking accounts or personal lines of credit from the borrowers bank. The other issue is that Banks in declining markets are reducing credit lines. So even if the borrower only takes out 10k on their 35k HELOC they could find out one day that their available balance has been reduced to 10k. Furthermore, the money they're lumping into their mortgage may ultimately have little affect on available equity. Case in point are those starting the program in Saratoga Springs Utah. I had a client whom purchased in 2004 for 235k, by 2007 the home was worth 375k, at that point they had consolidated a second mortgage and paid off credit before entering the program (300k loan). They took out a HELOC for 50k in late 2007. The paid down about 10k in interest the first year in the program, then all heck broke loose. The HELOC was shut off by the bank, the reason being the declining values in their community. So at that point they owed 10k on the credit line, and all available credit was waived by the bank. They then contacted me late Nov of 2008. The home value had tanked and now has dropped to 265k!!! Yep, they now have a first mortgage of about 290k, a second for 10k, and they are 35k up side down. Now this client struggled to keep their expenses in line with the software plan they built with UFF. The problem is that if you do not maintain the level of discretionary income that originally is inputted when your making the decision to purchase the UFF software, then you may find out later that the 8-12 year payoff plan is completely blown out of the water. So instead of it not costing you any extra, it's now costing you a whole lot more to payoff the loan in the 8-10 year time span. I guess you could just decide to bail on the program at that point, but then you've wasted $3500.

So let me ask yo a question....should the UFF agent whom sold the HELOC version of the program payback their commission if the Bank yanks the credit line? What kind of protection does the consumer have in regards to their initial investment when UFF's software melts down when it realizes the market values and the HELOC are gone?

Hey, the math may work for this program, but the reality is that it should only be applied in rare cases. Personally if I had the cash flow, I may use a personal line of credit in a MMA to generate an early pay-down on an investment home. But I could just as easily take the rent plus extra income and pay-down the investment mortgage in 10-12 years.

Anyway...glad you both like this program, but please be careful when discussing this with your clients.

FYI: You don't need a HELOC for this program to work. It 's actually not a good idea to tell your clients to get a HELOC. People are losing equtiy in their home and the bank can choose to close their line of credit. You only need a credit card with a minimum as low as $300. Actually I heard this program can work without a line of credit...just a savings and checking account, but this has yet to be confirmed.

FYI - true, but your client must get a personal line of credit approved by their bank (becoming harder to get). The other issue is the interest rate on the line of credit, and I know the UFF agent will say it's not a factor. It's factor for the borrower if they stop following the program and end up with a 25k personal credit line they have to pay back.

As for the checking accounts...very unrealistic unless they use their reserve account to make it happen. Again, same problem, you empty the reserve account and no money to make the mortgage payment if they lose their job or significant drop in income.

I'm sorry Karl, I guess I was blogging the same time you were. You are absolutely right. This company doesn't provide us as agents to have tax planning or financial planning. It's not a requirement to become an agent. Also we have never claimed to be a tax planner or financial planner. As far as HELOC's are concerned, I never recommend getting one (as I stated above). Now the terms and conditions of the HELOC should have come from the financial planner at the bank that allowed the consumer to open up that line of credit. It is not the responsibility of the agent to give terms and conditions of a HELOC...we leave that up to the professionals that hold those credentials. Instead of asking us for their money back, why not complain to the bank, our program can still do what it intended to do but unfortunately situations changed. Is this a total waste of money to buy the product? I don't think so because you can continue to use it later when it can be of some use. Our responsibility is to explain the product that we sell and promote...they can't buy HELOCS and credit lines from us. Am I saying to just sell the product and not offer any education, no. We are told to not give professional tax planning and financial advice but we can if we have that background and education. Again, allow your potential client to make an informed decision. Refer them to a financial planner or tax planner and allow then to make the decision rather or not the want to skin the cat their way or my way (with UFF).

I just read your message. How did we go from a $300 dollar line of credit to $25000!!!? And just to let you know, your funds only get depleted if you allow them to. My funds aren't depleted. I tell the software what I have available. Remember, computers do what you tell it to, not the other way around. It's up to you to tell the software what you have available. You don't have to disclose all of your funds...trust me I don't. Most people already have a line of credit, so you don't necessarily have to get another one from the bank.

Karl,

Giving back commission's is a valid question. I want to say no because they have no control over the bank issuing the HELOC. What if they did give back commission, values go back up, and the homeowner gets another HELOC (or the LOC gets unfrozen and starts working the program again? Will the homeowner have to give the commission back to he sales agent?

Should a Financial advisor who makes 1%-2% off a clients assets give back his commission to the investor/client if the client loses money? Nope.

I don't know of too many industries where a sales person has to give back a sales commission. Thinkabout all the software sales people who sell a major software to a corporation. 1 year later the corporation gets acquired by another company and they implement the other companies software program, rendering that one useless......the sales person doesn't give back his commission.

Again, I am not a UFF agent. But I see opportunity here. If someone can create a software program/spreadhseet that can help a homeowner out like this I can and sell it for $20/piece. Sell 50,000 of those babies and you make a cool $1 mil....and you become a superhero by helping others save a boat load of money. Takes maybe $50,000 to promote/market it...maybe less. If interested let me know...we'll get 'er done! Throw up a blog, a litle paid SEO, create a video, BAM! Actually, this isn't a great time, sorry....no equity..no HELOC. But maybe we can get in the $300 credit card business.....:-)

I agree with being carefull on dispensing financial advise. If this is doesn't work, why hasn't been shut down yet? You would think there would be some MAJOR lawsuits by now....maybe there has been...I don't know. UFF is making huge dollars....figure that after paying all the downline agents they keep about $1,500 on each $3,500 deal (on average). They have probably sold $100,00 of these...that comes to $150 million....yikers.

Sounds like your Saratoga guys problem was the $65K cash out he did...not so much the UFF deal. If he didn't suck the equity out of his home he probably wouldn't have felt so bad and tried paying it down so fast with UFF. The UFF didn't cause his home to go upside down...the drop in value and his ATM mentality did...he would have been upside down regardless of the $10k he used for the UFF program. People like to point fingers at others when they make bad financial decisions....this Saratoga guy is probably blaming UFF. Besides, who cares if your upside down $5k or $50K if you plan on living there. It's the people who primarily bought with greed and short term thinking (ARM or I/O loans) while looking at equity/or lost equity who are pissed. Many people treated buying a home like gambling in Vegas.

Christina, come on...$300 to make it work? Maybe if your home mortgage is $40,000 and you make $20,00/year.

JAN

Yeah, a $300 dollar credit line will allow the program to work. Now the results of how fast you actually pay down debt varies depending on how each individul person's resources are. I know it may sound hard to believe... but it works and we (at our mortgage office) have seen it work. But I do understand how that can sound unbelieveable...but like I always tell people, you have to see it to believe it.

JAN

For those of you wondering why I haven't reponded, I was on a trip to Bolivia and just got back last night. I am still digesting all of the commentary and will discuss them further when i get a chance, hopefully this weekend, but more likely on Monday.

In the meantime, take a look at this post, which I wrote in the back of the airplane on my return flight yesterday...

Your Mortgage: Liability or Asset?

FEB

OK, I finally had a chance to review all of the previous comments and while some of this may be repeating points made, here is a reply to each of you from after my last comment (I know it is long, but I am not one to commment to everyone seperately)...

Chuck - It is not about trashing the program itself, rather to trash the way it is marketed, which includes multiple misleading and occassionally false information. Most of the false stuff is gone do to efforts of mine and others to expose them. I remember back when these guys were publishing that fixed rate mortgages weren't really fixed rate mortgages, which some of their agents still bring up and is complete BS. I also strive to educate people that these programs are almost always not the best programs out there, and not just the MMA.

Jason - Glad to see you here and that you are enjoying the discussion. Please join in any discussions as i begin posting on AR more often again (hopefully).

Roland - I saw it mentioned several times that one needs to make an "informed decision". Well, for that to happen, the person selling the product needs to be able to do a side by side comparison of ALL strategies, not to mention hit on the tax and financial implications of their decisions. I have yet to see a seller of these products with that level of education, and certainly not all of that is presented to their clients. While the product itself may not be "risky", it can easily put its users in risky situations financially, as Karl mentioned.

Mike H. - You're correct. With the amount of free calculators available, one just needs to spend a little time finding the ones they like and using them to accomplish essentially the same thing the MMA does. heck, last I saw Quicken, it had pretty much everything you needed and you can budget as well as balance your check book and only costs $40 or so.

WMS - You hit on one of the many topics I discuss in my blogs, which is that one's mortgage needs to be incorporated into an overall financial plan or financial destruction can, and usually does, result. While the MMA is sold as financial software, at the same time its disclaimers say it does not provide financial advice. Is it any wonder that the majority of their agents do not have a financial background, nor adequate education on such matters?

Tim - I got your email as well, and you should get my response shortly after this comment is finished. In the meantime, here are the basics...

Does the MMA work? Yes, never said it doesn't, just that it is not worth the money and is most likely not the best thing out there for even paying off your mortgage the fastest way possible. it is certainly not the cheapest.

Like diet plans, you will always hear the success stories and not the failures, so plan on about 10-15% of people to maintain use of the program in the long run, just like diets and gym memberships. As for numbers, check out these posts...Money Merge Accounts: My Sincerest Apologies to Those With MMAs and Money Merge Accounts: How Do They Work? (Beyond the Software) Part 3

Devin - One of the best things about this program was its use of HELOCs. Other credit lines are not tax advantaged, not to mention can hurt your credit by carrying balances. Of course, when it coems to HELOCs and credit, they are the same as a credit card for lines less than $40,000. Even then, HELOCs carry lower rates than personal lines of credit and certainly credit cards. I cannot believe people are advocating using credit cards for making this program work as most people have trouble paying off their credit cards each month in the first place. Come on, the ones who need this program the most on the ones who can't qualify in the first place, or at least shouldn't.

As for the software being able to help pay down other debts, great. I am glad to see that they are adapting, but even then, it only takes a moment to find a free calculator that can accomplish the same thing. I am also glad to see you agree with keeping reserves and that the program can be adjusted to what you want, but then it doesn't work as advertised either, as you cannot pay down your mortgage in 8 - 12 years without diverting all discretionary income into your mortgage, unless you make a huge amount anyway. Additionally, just having reserves is only a part of the overall financial picture, so the program cannot address what is truly in the clients' best interests.

You did hit on one key point, which accounts for any strategy. One must continue it for it to work, and like diet and gym memberships, systems may work,but people fail. I prefer that they fail in a liquid position that can pay their mortgage payments for a long time to come, rather than trapped in their home and facing foreclosure or bankruptcy.

CityCan - Questioning someones motives is usually a good thing, I do that a lot when deciding what is the best course of action. Contrary to your belief, I have never gone to great lengths to prove this as a fallacy (never said it didn't work, read my blogs), rather discussing how it is not worth the money and is most likely not the best solution out there. You can certainly try to discredit me all you want, but the reality is I have nothing to gain by blogging about the subject other to educate people, not to mention the fact that even leading financial minds agree with what I am saying. Ulterior motive? If educating the masses on financial concepts qualifies, count me in.

Michael - Great points, some of which I mentioned in the post on my previous comment about your mortgage being your greatest asset. Thanks for adding that to the discussion.

Lyn - I know Jeff was having issues posting comments back then, so it may not have been intentional and I was just making a joke about it. I will have to check out your book review some time, can you email me a link?

CityCan - I see you added more, so let's take a look at some of what you said. You are correct, every corporate structure is a pyramid, the main difference being you can jump to the top of the pyramid in the corporate structure versus the MLM. We can agree to disagree on the general subject of whether paying off one's mortgage is best for most, if not all.

As for paying off a mortgage of 6% being like investing at 6%, that is a false statement save for one thing beyond leaving the tax benefits out of it. The only way you can essentially say that as true is when the investment is depleted to pay off the mortgage at the EXACT moment they equalt each other, otherwise the investment is still a much better deal as when the time comes, the investment still has its money working for the investor instead of trapped in the home earning nothing. How much interest you saved is irrelevant if you earned more, which investing can provide and your home cannot. HOME EQUITY HAS A ZERO PERCENT RATE OF RETURN.

The answer to your tax question is typically yes. The financially savvy are more than willing to pay interest on their mortgage because they can make more money elsewhere, and even the average person can do the same with a little education and research. I will have to reload my post from a while back that talks about what you have mentioned, titled "Would you rather spend $6 to save $4, or spend $4 to earn $6?"

Adding another quote often attributed (but not verified) to Einstein and used by UFF agents, "Those who understand interest earn it; those who don't pay it". Well, those whom truly understand it are willing to pay some while earning more.

Karl - Thanks for adding the "little pain" selling point, as it is one of the main reasons this program exists. Also, your nutritional experts analogy is right on.

Brad - First off, just Google "financial calculators" and see how many are out there, which can be combined to do what the MMA program does. The interest cancellation effect that is toughted by the sales force is minimal at best and I have shown that it doesn't amount to the cost of the program, at least not in the life of the loan, and that was using their own example from their sales video. as for "budgeting software", Quicken can do wonders and it only costs around $40 or so. \

As for designing a spreadsheet, I am busy doing other things at the moment (writing a book and starting a new mortgage service in the near future) and don't even have the time to originate loans right now, let alone design a spreadsheet or software. Maybe that will be my next project.

Christina - Yeah, I don't know what happened, but this post took off like a firestorm in strong winds. Welcome back. I am glad the program is working for you and that your passion developed by its use is your sales point, but you haven't proved that another strategy may have been better.

You were the one whom brought up the topic of making an "informed decision", but that is part of my (and many others) problem with the way this is sold. in most cases, if not all, the purchaser of the product has not been completely informed, and in most cases, they may have even been mislead along the way. I wonder how many times this product has been presented alongside other mortgage planning strategies. I know I have never seen it, except in my own analysis posted on my blogs, which each time shows that using the UFF sales example is not the best overall solution, nor is it necessarily the fastest way to pay off one's mortgage due to the rules of money.

Again, I respect your belief in the product as a user, but that does not mean it is the best solution for most and that is my point.

Karl - I see you came back as well. Thanks for addressing the professional competency question as that is a key point in cleints being able to make a truly informed decision. Also, thanks for adding to the discussion that Brad brought up.

Christina - Welcome back as it appears many are frequent commenters on the subject and I am glad to see the discussion continuing this way. Sure, a HELOC is not required, but credit cards can prove lethal to one's finances. An extremely disciplined individual may be OK doing they are very rare. As far as a simple checking or savings account goes, I would be very careful with those as well. Another word of caution is to those whom say to use business accounts since they carry balances in their savings accounts as well, co-mingling personal and business funds. The IRS will have a field day with people who do this as the determination of impute income and the failure to pay taxes on that can raise plenty of penalties. I am not a professional tax advisor, but I do know much about how the IRS works and what imputed income is.

ALL - I see the discussion continued among Brad, Christina and Karl from there. most of which was just repetition, so I am not going to address it beyond the following...

As far as the UFF agent qualifications, the disclaimer says they do not provide financial or even mortgage advice, so are they truly qualified to sell this product? Probably not, though some do originate mortgages at least.

Before anyone should embark on any strategy, it should be discussed with their financial advisor, CPA, tax advisor, or anyone else with the professional qualifications. Even I am not fully qualified to give everyone specific advice on tax and financial planning, but I do have enough education about the tax code (actually have read much of it) and financial concepts to point people in the right direction, which is why i like working with CPAs, financial planners and other related professionals to make sure the client's whole plan comes together and does what it is supposed to. Besides, with a team of professionals like that, chances are the client will stick to the plan and make sure it works.

FEB

I have run number camparisons for a couple of clients that were being "sold" these MMA's from UFF

Nice videos, great website etc... The math never lies... I ran Amort schedules given the fee's and the application of the positive cash flow from a household and without exception the client NEVER saved money with the MMA.. four letters Scam

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