96 thoughts on “What Does Dave Ramsey Think About United First Financial

  1. BTW Tracy, your blog does not like comments with long URLs in them. That is sort of weird and annoying. That is why I’m TinyURLing even in html.

  2. Tracy Coenen

    Can you tell me more about the link problem? It has worked fine for me in Firefix and IE.

  3. I just tried posting the Kiplinger link a few times. It submitted, but the link didn’t appear. I re-submitted and it said it was a duplicate comment. Perhaps is it getting caught by your spam filter? Since I already have my website linked, posting another link would make my comment more spammy.

    If you have a blog spam filter perhaps my posts are ending up there.

  4. Tracy Coenen

    Yep, definitely a spam problem. And the more you try to submit, the more it confirms to the ‘puter that you’re spam. I’ve unspammed you and all should be well now.

  5. Tickled

    I hereby offer my computer program to tell you which debt to pay off. I am only asking $2,999 and not the $3,500 these guys are selling theirs for (you’ve already saved $501 !)

    I claim copyright to the following algorithm:

    While more bills:
    If this bill has the highest interest rate Then pay off that bill first.
    Next bill

    Please make checks payable to Obvious Solutions, Inc.

  6. TZIG

    Being in the finance industry for over 12 years I will verify that the math works due mainly to the way interest accrues on a typical closed end mortgage (daily) and the way it accrues on a HELOC (monthly based on average balance). You are in essence leveraging funds. Moreover, you change the amortization schedule of your mortgage (how much of your monthly payment goes toward interest as opposed to principal) as you make additional principal payments using these “leveraged” funds from the HELOC. The way UFF sells it is that the $3500 comes out of the HELOC (not out of pocket) and over X time more than pays for itself. All of this will absolutely work….for the right people and the right situations. If followed and managed properly, you will have paid off your mortgage without running up the HELOC balance.
    I was approached about selling this product and felt that I had many clients that would be able to manage this and benefit greatly. The problem is that I don’t feel it is for everyone. The way they are marketing this product is what really turned me off. I initially wanted to refer my clients that could benefit from this software to the UFF “Branch Manager” that approached me for a split of the sale commission. She apparently wasn’t satisfied with that proposal and continued with all the hard sales tactics regardless of my legitimate and well explained objections. In the end I felt it was not worth subjecting even a percentage of my clients to the multi-level marketing sales tactics and all of the stigma that goes with it.
    Its a shame because the product is a great tool for some people.

  7. Tracy Coenen

    Sorry, TZIG, but the savings have almost nothing to do with the program and HELOC and almost everything to do with the prepayment of principal on the mortgage. That’s not worth $3500. And it’s not worth paying interest on that $3500.

    If you do the math correctly, you would see that the program saves you a few hundred dollars a year, and that’s only if you follow it to a T. Even if you do save $200 or $300 a year because of this money shuffle, it’s offset by the cost of the program.

    See this article regarding the savings:
    http://www.sequence-inc.com/fraudfiles/2008/05/18/the-united-first-financial-system-is-based-on-the-australian-banking-system/

    Consumers are better off doing a debt snowball plan which they can do for free. And it’s very easy to understand and apply. And did I mention it’s free? Or that it’s FREE?

  8. TZIG

    Please re-read my post Tracy. I mention the savings through principal reduction. However, do not discredit the savings through the difference in the accrual of interest on a HELOC. Especially in such a general way as the savings would vary significantly depending on the borrower’s specific situation in regards to loan balance, amortization, debt, income…etc. Like I mentioned it’s not for everyone.
    However, even with your referrenced savings of $300 per year from the “money shuffle” ….if applied to the principal would knock 20 months off a $200K, 30 year mortgage at 6% and save $14,965.76 in interest. Far more than the $3500….agreed?
    That said…..I do not advocate UFF or thier MLM tactics…and will agree that the products value at $3500 is debatable at least.

  9. Tracy Coenen

    You almost had me.

    Here’s the thing: Saving $300 a year is best case scenario from the money shuffle.

    Even assuming you achieved that, you still should not do it. Instead, apply the $3,500 up front to the mortgage. You’ll save over $16,600 in interest by doing that, which is a better deal that what you’re proposing.

  10. TZIG

    How can the savings of $300 per year be best case scenario from the “money shuffle” when each borrower’s specific situation regarding loan balance and remaining term on thier closed end 1st mortgage as well as the average monthly balance on thier HELOC will vary case by case? Remeber, the borrower will be using the HELOC as a checking account paying debts and depositing paychecks/income as they go.
    Therefore, the average monthly balance could vary significantly case by case based on the amount of debts and the amount of income of each borrower/customer. The difference between monthly interest on the 1st mortgage and the interest on the monthly average balance of the HELOC couldn’t possibly be maxed out at $300 per year.
    In a rush…I may not be explaining this well enough….but I promise to visit again tomorrow. Thanks for entertaining my thoughts.

  11. Tracy Coenen

    It’s simple. The money shuffle offers little to no savings. All of the savings are achieved by advance payment of the mortgage.

    You are taking a higher interest rate on the line of credit and playing around with it and pretending you’re using a checking account. You are saving a few days to a couple weeks worth of interest on your dormant funds that would have otherwise been idle in your checking account.

    How much savings can you possibly realize from that? The experts say it’s a few hundred dollars a year.

    If you’re a high earner, you’ll be putting all your excess funds toward the mortgage with this method, but your savings aren’t because of the money shuffle. They’re because you’re prepaying your mortgage.

    Tell me you understand this?

    UFF brags that this is based of the Australian banking system. Here’s what they say in Australia about it (it sucks):

    http://www.sequence-inc.com/fraudfiles/2008/05/18/the-united-first-financial-system-is-based-on-the-australian-banking-system/

  12. Michael Goode

    “Here’s what they say in Australia about it (it sucks):”

    Tracy, that is eloquent as always.

    As to TZIG’s 5:04pm comment, you need to do a net present value calculation. You can’t just add up yearly savings for 30 years and compare that to savings in year 1.

  13. Tracy Coenen

    Michael – I don’t know if your comment is for me or him or both….

    I do these calculations in a spreadsheet, applying the savings when they occur.

    So I took $300 a year ($25 a month) extra off the mortgage every month for 30 years for TZIG’s preferred method.

    I took the $3,500 extra off the first month for my preferred method.

    I ran both all the way out to 360 (or less as the case is for both because of prepayment) and added interest savings for both. Of course, I win because I take off a big chunk up front and immediately start saving interest.

    The bottom line is that anyone can save themselves just as much (and probably more) by using their excess cash to prepay their mortgage without a computer telling them the exact day on which to do it.

    Like I keep saying… the real savings is not from the shuffle provided by the software. The savings are almost exclusively from the prepayment with excess cash. Period. No software needed. (No expensive HELOC either.)

  14. Oh, yeah, I guess I was unclear. Of course you (Tracy) had done the inverse of the NPV calculation, which is just fine (extra interest from $3500 smaller down payment compared to yearly savings from the thingy).

    Most people don’t think about NPV. Another consequence of that is people paying points to pay down their interest rate. That usually doesn’t make sense unless they will keep the house for 10+ years (fairly abnormal nowadays).

    TZIG should go back to his finance books. NPV is in one of the first chapters. He was comparing non-comparable numbers.

  15. Tracy Coenen

    Yayyyyy!!! We know how I love it when people agree with me. And when they say I’m eloquent. LOL

    The other thing UFF doesn’t consider is the cost of getting the HELOC.

    Also, I’ve been told that the software limits the comparison that can be made during the demonstration to the potential sucker. I’ve been told that you put in the base amount of your mortgage payment but can’t add on extra payments. Extra payments are only factored into the “see how good UFF is” part of the comparison. And obviously, that side of the example looks far better because you pay more toward the mortgage than the “base” scenario.

    Anyone wanna be a guinea pig and go through the analysis w/ an “agent” to tell me if this is indeed the case? If I can verify it I want to write more about it, because I believe that’s deliberately deceptive.

  16. Winston

    It looks like you are starting to understand how the MMA works. True this program is not for everyone. But there are many people that utilize this software and it works wonders for them. A couple variables in everyones calulations that has been left out are; one, that life happens, how do you send extra money to pay down your mortgage if your overbudget for a month or two, simple, people don’t, the MMA takes all the guess work or hours of number crunching out of it for you. Two, Human Nature, this program believe it or not has a tendency to instill thrift in people, by simply following the program you are on the right track, it gives people peace of mind, flexibility, and confidence in their financial futures that they would not realize if not with the MMA.

    My thought for Tracy is that you may want to view this product from the general publics eyes not just your own.

    On the topic of Dave Ramsey, no doubt he is against the MMA, their are several things that he has been preaching for years and years that the MMA contradicts. To endorse this program he would be going back on what he has preached for so long that has gotten him to where he is today.

    Questions for all MMA nay-sayers:

    Why did the magazines such as True Wealth, Broker Banker, Personal Real Estate Investor, Mortgage Planner all endorse this product if it has no value?

    Why did wells fargo offer a substantial dollar amount for their own private label of the software?

    Why are so many, more and more each day, well educated Financial professionals not only endorsing this product but adding it to there business?

    I have gone down this road so many times myself, trying to break this program, extensive research and calulations, looking for anything to punch a hole in it. I know you want to hate it, but the truth remains that this company is growing and only begun to change the financial landscape of America.

  17. Tracy Coenen

    *sigh*

    I’m going to have to start deleting comments from those who haven’t read what I’ve already written on this topic. I’ve been over and over it.

    It wouldn’t make sense to view this product “from the general public’s eyes.” I’ve knowledge of finances that some people don’t, and math skills that allow me to determine that this product isn’t worth $3,500.

    If you need to spend $3,500 to get some “discipline” in your spending habits, you’ve got bigger problems than anyone can help.

    The magazines you’ve listed, as I’ve said several times here, have printed fluff pieces on UFF. There is no substance behind the articles because they were meant for marketing purposes only.

    I don’t know about the Wells Fargo deal, so I can’t comment. Even if they did want to “private label” the product, it doesn’t mean it’s worth $3,500 to a consumer.

    I’m not saying the program can’t work. I’m saying it’s not worth $3,500 because a consumer can do just as well on their own by using simple math. If they need a little help, there are plenty of inexpensive books on money management that can help them.

  18. Winston, to answer your question:

    “Why did the magazines such as True Wealth, Broker Banker, Personal Real Estate Investor, Mortgage Planner all endorse this product if it has no value?”

    I would say because those magazines are dumb and the people who write for them are dumb. Why did one WalletPop blogger recommend the product? Because she was dumb.

    Here is a better question: Why have Fortune, SmartMoney, Forbes, and Kiplinger’s failed to endorse the MMA and UFF? Because they are less dumb.

  19. Winston

    Michael,

    Sorry to hear that so many people are “dumb”. If ingnorance is bliss, you must be one grumpy bugger.

    Tracy,

    I beg to differ that anyone on their own can match the advantages that the MMA provides in telling the user on how much to borrow(to the penny) and when to borrow it. Do you think the most savy investors out their use only their money to invest, NO that would not be as benificial as using other peoples money. Given a person is as diciplined as a machine to send in extra money each and every month to their 1st mortgage untill it is paid for is just rediculous. Not going to happen….Ever!

    I agree that people can pay their mortgage down much faster on their own, just not as fast as with the MMA. Over the coarse of paying the mortgage off the MMA will more then pay for itself. Period.

  20. Tracy Coenen

    I’ve already shown on this blog how the silly money shuffle (which is the big selling point for those pushing UFF) will save you a maximum of $15 to $20 a month. You will NEVER recover your investment that way.

    The real savings comes with prepayment of one’s mortgage with any excess available cash, and it matters very little if you make that extra payment this week or next week. UFF would have you believe that you need to know THE PRECISE MOMENT to make that payment. You don’t. When you have the cash, pay it on the mortgage. Simple.

    But you’ve bought into the smoke and mirrors, and there’s clearly nothing I can say to make you see otherwise. You and many others want to believe in this product. If I’d wasted $3,500 on it, I’d want to think it’s fantastic too.

    And I have to tell you that if someone who wants to pay down their mortgage quickly is too dumb to pay extra each month (as you’ve said, that expectation is “rediculous”) then they have problems. Seriously. I have paid extra cash toward my mortgage every single month since I bought my house. It wasn’t hard. I promise.

  21. I’ll second that–it ain’t hard to prepay your mortgage with extra cash. If you can’t figure out how to pay extra money towards your mortgage then you are not responsible enough to own a house. There ain’t nothing wrong with renting.

  22. Winston

    Michael,

    That last comment you left clearly classifies you as someone that should not be taken into concideration. Stop now… please.

    Tracy,

    Again, you are clearly thinking for yourself. Have you looked into how many people know about the Bi-weekly? Compared to how many people really use it? Speaking in terms of the general public, people need this program. I am sure you are very responsible and on top of your money game. I am also convinced that you are extra money to your mortgage. What about the people out there that are responsible with their money and want to pay down their mortgage faster, but don’t want to lose liquidity in there descresionary income every month. Using the Line of credit takes that out as a factor.

    I still didn’t seem to get the fact across to you that borrowing small amounts from the line of credit for short periods of time, far out performs your method of save up and send in.

  23. Tracy Coenen

    You didn’t get the “fact” across to me because it’s not fact at all.

    Under optimal conditions, the method employed by UFF saves a consumer a maximum of $15 to $20 a month.

    That will never surpass the $3,500 fee to UFF that could be applied directly to one’s mortgage.

    I can’t explain the math any clearer, I’m afraid.

    And as far as I’m concerned. Michael’s last comment was exactly on point. You can’t even spell, so I’m thinking maybe we shouldn’t take what you say into consideration?

  24. Winston

    I kan’t spell, it is true. You got me on that won.

    Sorry for the typo’s I am doing several things at once.

    Under optimal conditions? What are these optimal conditions you are reffering to? Are you aware that the analysis does not take in to count that their are several ways to optimize the software even futher i.e. credit card float, getting your escrows in your own control, paying insurance premiums up front so that you can have greater cash flow through the line of credit, compressing the average monthly balance even lower, thus lowering the effective interest Rate( or interest cost/expense). Did you take all of that into consideration in your ” Optimal Conditions”

    Statisically, people are running twenty to twenty five percent ahead of their original analysis. So if a clients payoff is ten years in reality they are looking at around eight, given they figure out how to optimize usage of the software.

  25. Winston,

    While you are bashing me for not being worthy of “concideration” (translation: “being near cider”), your whole argument that the MMA and UFF program makes it easier to save and pay down debt is fallacious. The last thing people with debt trouble need is another line of credit. Everything that program offers (except the $15 to $20 per month) is available much cheaper elsewhere.

    Budgeting is easy to do with Quicken (or similar free programs, such as Mint.com). One thing that psychological research has shown is most useful in improving saving behavior is to make it automatic. Almost all banks allow for setting up recurring automated payments. By automating mortgage and utility payments it is much easier to stay within a budget and pay down debt. 401(k) plans can be tweaked so that more money is withheld from the paycheck.

    So there you go–there is no need for this product (at least not at a price above $100).

  26. KM

    I have been looking for a way to speed up the amortization on my conventional 30 yr fixed rate mortgage. I was very intrigued by this program thinking that the HELOC allows for you to speed up the periodic amortization. There is so much conflicting opinion about this, so I finally sat down and ran the numbers myself. I have excellent credit, and the fact is the difference between the fixed rate at say 5.5 and a HELOC is approximately 2%. I did a zero free cash flow model, meaning nothing left over at the end of the month. The fact is that the savings from the lower HELOC average daily balance are met or overwhelmed by the interest rate spread. At best it would be a very minimal savings. As many have said above, there is no doubt the interest rate savings are derived from the cash flow positive nature of any sound budget and the prepayment acceleration which anyone can do by themselves.

    My problem is with the way this was is marketed. I sat through the entire 43 minute presentation. They actually claim that the $23k interest rate savings from the $5k prepayment is an apples to apples comparison to the $54 monthly cost of carry on the HELOC. The fact is, they should be comparing the cost of carry on the fixed rate loan with the cost of carry on the HELOC, which is almost identical. Very slick marketing that most uneducated customers would buy hook, line, and sinker. They literally lie and say their “discretionary income” (i.e. money left over at end of the month) numbers are not driving the savings. Aren’t they subject to the Truth in Lending standards that most financial firms are? That is a disgusting misprepresentation. A better product would be a mortgage that amortized on a bi-weekly basis, or weekly basis (as opposed to the standard bi-weekly scams that other firms are running). That is a topic for another day.

  27. Ed

    Tracy,

    This is a very interesting discussion. You are correct in saying that the product isn’t worth $3,500. You are also correct in that it could provide some small savings each month. A price of less than $500 would probably make some sense. However, there are alot of people who do need help with budgeting and savings, and this program seems to help with some of that.

    Thank you for a very useful web-site and discussion blog.

  28. Mike Strate

    Ok,
    If the homeowner does not have $3,500 how can they pay down the principal. Secondly, less than 5% of all homeonwers ever pre-pay on their mortgage, I was told it was actually less than 1% but let’s be conservative. If the Money Merge Account gets the homeowner to follow their program. Then the first 10 years the homeowner pays interest, the interest amount is dramatically reduced. Also, the homeowner is not incurring more debt, when a transfer goes from the line of credit to the 1st mortgage the princiapl balance is still the same. It is just that the 1st mortgage principal has been reduced by the amount the line of credit has been increased. Compared to changing balances on a credit card for a lower rate. Instant feedback tends to modify behavior and homeowners using the MMA will see the benefit on a daily basis and therefore continue to use it to get out of debt. Sometimes when you preach something for so long and a new idea comes along, it is hard for some to embrace new concepts. No explanation needed, we know of many of these times in history this has happened. SO, when less than 1% of Americans prepay the principal on their mortgage and a company comes along that has thousands of homeowners on track to do so, they should be applauded. The impact to the economy will be altered when billions of dollars the banks would have earned interest is in the hands of the American Consumer. DO the math $100,000 per home/1 million homeowner’s (less than 2 % of the homes in America) that’s 100 billion in interest savings.

  29. Tracy Coenen

    Like I’ve said… if someone needs to fork over $3,500 in order to get some discipline and prepay their mortgage, they have SERIOUS problems.

  30. Mike Strate

    Debt and the facts that the banks never want us to be out of debt is the problem.
    Americans do have have serious problems. We overspend, live paycheck to paycheck, borrow and spend, spend and borrow. United First offers customer assistance as long as the homeowner needs it and allows the homeowner to transfer the MMA system from mortgage to mortgage or house to house (5 times) with only a nomial $100.00 transfer fee. IF someone uses this system for 20 years the cost is less than $15.00 per month. No one can hire a financial planner or cpa or any type of professional that would give them monthly advice, keep track of their spending habits, give them a REAL TIME pay off date to be mortgage free AND most of all a system that keeps them on track, because budgets don’t work IF they did we would not have the debt problems in America that we have today.

  31. Tracy Coenen

    Budgets DO work, it’s just a matter of whether or not people want to follow them. I don’t care if you break it down to a monthly cost over 20 years – $3,500 is TOO MUCH. They can follow my plan for free or they can buy inexpensive software like Quicken which will help them track their spending habits just like this stupid MMA claims to do. They can have a SYSTEM for next to nothing, or they can pay $3,500 for a SYSTEM that does almost the exact same thing (although they probably don’t even understand the money shuffle).

    Plain and simple: It’s stupid to pay $3,500 for this.

  32. Joetta

    Let me start by saying that for nearly 8 years I have been a mortgage loan originator. My understanding of budgeting is something I have shared with customers repeatedly, though that was not part of my “job description.” However, once I took a look at the Money Merge Account (which is not a “stupid” program, as inanimate objects have no brain so they cannot be “stupid”) I believed in the product to the point I recommend it to others.

    The earlier post where $3,500 would save $20,000 in interest may apply occasionally to some scenarios but won’t apply across the board. So you can’t just throw those figures out without knowing an individual or family’s complete mortgage information.

    This program works like an accountability program and helps keep people on trace, 98% after two years. Tell me another program or group that has that type of success rate after two years. I can’t think of one.

    This is a once in a lifetime purchase, can be used over and over without a monthly fee.

    And, lastly, with no disrespect to Dave Ramsey or others (I purchased Mr. Ramsey’s most recent book) if this program functions as guaranteed (and it’s guaranteed in writing), then there would be no need for Mr. Ramsey, Crown Financial Concepts, or others financial budgeting services. Without spending hours reading, attending seminars/classes, I am able to help people become debt, stay on budget, save $10,000s and even $100,000s in interest. Not only on their mortgage but also on other debts.

    This program works! Even if you owe nothing except for your home, it can still help people be mortgage free in 3-6 months faster than without the program. I’d be glad to run an analysis with any individual that wants to see the truth.

  33. Tracy Coenen

    Joetta – LOL – You don’t “recommend” the product. YOU’RE SELLING IT! Of course you’re going to tell people it’s fabulous. You want your cut of the $3,500. And who wants to spend “hours” learning about proper financial management when they can just flush $3,500 down the toilet with you, right? I don’t think anyone’s saying that what UFF has doesn’t “work.” It’s just that people needn’t waste $3,500 to get what you’re peddling. There are many cheaper (and even free!) ways of doing it.

  34. mike strate

    Tracy,
    Have you ever demo’d the program?
    What % of Americans need a debt elimination and wealth accumulation program?
    Is our country drowning in consumer debt?
    E-mail me if you want a demo>

  35. Joetta Everett

    Since I’ve seen multiple postings by the same person, I thought one more from me wouldn’t hurt.

    One lady is right in saying that people have a serious problem if they have trouble budgeting. However, I don’t believe they should have that thrown in their face.
    I’ve seen how the Money Merge Account acts like an accountability program and helps people stay on track where they haven’t been able to do so in the past.

    Also, I don’t say that the program will have you out of debt in eight years. I do say that most people will be out of debt between 8 and 11 years. When running an analysis, we ask how much does the individual/family have left over at the end of the month. That amount is what the analysis calculates from. If you say you have $300 left over but decide you’re so excited at how this program is working and you “choose” to change your lifestyle to you have an additional hundred or two to add to it, then you do that by choice. Then you’ll be out of debt faster than the original analysis.

    After twos years the beta test group, 98% percent of them, were 15-25% ahead of their projection. I believe it was because they saw how well this program worked and decided to reduce their normal spending to reach their goal even faster.

    Again, if you haven’t had an analysis run, haven’t seen the true numbers, don’t speak poorly of the program. Lots of people could pay their debts and bet debt free much earlier than they are…but they’re not doing it! If all this program did was to help them stay on task, it’s worth every penny. People that don’t struggle with budgeting have no idea what type of stress this creates for individuals and families. In more than a monitary sense, this program is, again, worth every penny…maybe even more.

    Blessings to all…

  36. Tracy Coenen

    I’ve seen the demo. Still a waste of money. And the demo is misleading, by the way.

  37. mike strate

    You saw the analysis? or the demo? there is a difference
    Have you seen the Businessweek article. Done by Columbia and NYU that mathamatically states the best mortgage to have is an interest only with a HELOC provided the homeowner has a program to run the computations. Columbia, NYU, Wharton, Northwestern, Fordam and others state in a 65 page report with computations included that this is the best way. By the way, where did Dave get his degree. Is it true he filed for bankruptcy multiple times?

  38. mike strate

    Tracy,
    Last comment from me. AT $3,500 over 20 years is less than $20.00 per month for a debt elimination tool that requires little or no effirt on the part of the homeowner other than to follow the plan. Do you know of any financial planners, cpa’s, or other professional that will do this for $20 bucks a month for ten to fifteen years?

  39. Tracy Coenen

    The real cost is actually $80+ per month when you consider the interest savings of $20,000 that a homeowner could get if they put the $3,500 on their mortgage instead.

    And your question avoids the reality that a CPA isn’t required to do what the MMA does. All the consumer has to do is pay an additional sum of money on their mortgage each month. And that’s free.

    But you’re not going to admit this is true because you can’t sell this junk if you do. I understand.

  40. Winston

    So if this software is a waste of money and what ever else your worthless opinions might be. Why did Ernst & Young give Ufirst an award?

    I would you suggest that you and the rest of the nay-sayers start a list of people that you need to appologize to for the miss direction.

    This company has a vision to help people out of debt. Let me spell it out for you. THAT IS A GOOD THING!

  41. Tracy Coenen

    I assume they gave them an award because they have a clever plan for squeezing the life out of consumers $3,500 at a time. 🙂

    There’s no “miss direction” here, nor any misdirection. The software is a waste of money, plain and simple. Consumers can get out of debt for free. They don’t have to pay thousands of dollars to a predatory company like UFF.

  42. Winston

    To anyone that reads this rhetoric about negative views on the Money Merge Account. I hope that you are capable to have an independent thought an do your homework to find out if this product is for you or not.

    Please don’t just take in the opinions of anyone about this product, good or bad. Find an agent in your area and have a free analysis done. And you decide for yourself if this is right for you, with your own mind.

    Tracy… shame on you! This world would be a better place without the closed minded people like you. You are either uneducated on the product or you are Ufirst competition. Which is it?

  43. Tracy Coenen

    No Winson, shame on YOU. You are peddling a product that is a complete waste of money. I have absolutely no financial interest in this product or any other product like it. I have done independent research on the products and determined that it’s not worth $3,500. And you suggest that people should visit a vulture such as yourself for an “analysis” that will recommend that they buy the product?

    But you’ve done the typical thing: Accuse those who see through the sham as “uneducated” or “ignorant.”

    My mind was very open. It just so happens that this product is a complete waste of money. And the more people like you stoop to personal insults (rather than actual facts) the more I know I’m exactly on target with my conclusions.

  44. Winston

    Hitler was right on target with his conclusions too.

    So you are for Debt not against it. If America falls like Rome from the debt accumulated in this country, look no furthure than the mirror for someone to blame.

    Good Job.

    I seriously hope no one listens to a word you have to say.

  45. Tracy Coenen

    You might consider brushing up on your reading comprehension skills a bit. I’ve said that it’s good to pay down debt. We just don’t need UFF to do that.

    Further, UFF puts people MORE in debt with their $3,500 fee and the use of a HELOC w/ a higher interest rate than one’s regular mortgage.

    Yes, I suppose people should ignore me, who has absolutely nothing to gain one way or another (whether they use UFF or not). And they should listen to you, who wants to earn that $1,000 commission when they pay UFF. That makes a whole lot of sense. Methinks you’re just a bit biased. I have nothing to gain so I tell it like it is.

  46. Fred

    Winston,
    Tracy just ate your lunch.

    Pure and simple.

    Moreover, unlike you, she never had to resort to ridiculous analogies to dead German dictators and financial armegeddon.

    For the record, I was invited to join a webinar on this topic this evening, but was unable to attend. However, I now see my time spent with my family was aptly prescient as the laughable combinaton of your, Joetta’s, and Mike Strate’s attempts to muster any semblance of reason from such a ploy is fodder for a fool’s errand.

    Consider Amway instead.

  47. Joetta Everett

    Tracy, my understanding of these types of pages is for people to share ideas, not to be demeaning or slanderous. You can have your opinions without attaching others. The word “predatory” is a hot button these days and is generally used in reference to lending. I’m not sure what your professional background is or if you’re just a big Dave Ramsey fan, and that’s fine. Like I said, I bought his most recent book. But just like we don’t observe dental practices like we did in the 1850’s, the financial industry isn’t run the same way either. With the technology that is available today even operations are done in a completely different manner.

    Dave’s a good guy, has helped a lot of people, but numbers don’t lie. Whether it be the MMA or another device that shows you a larger interest savings, enabling an individual to become a better steward of what they have been blessed with, then go for it.

    Continually using the example of $3,500 will reduce your long-term interest by $20,000 is misleading. It may be correct for a few is may be much less or even more. It’s all about the NUMBERS. As humans we are incapable of doing these calculations in our heads.

    Yes, paying extra each month will reduce your mortgage. However, we’ve been brainwashed by years of indoctrination that most people will always be paying a mortgage. Enter Dave Ramsey and many others who opened the eyes of many. And that’s wonderful! It has given people hope. And that’s wonderful too! As with a friend of mine (for over 35 years) saw, we took his 27 year mortgage and he’ll now be paid off in less than 5 years. Yes, he makes a lot of money but even though he’s done well with investing, keeping debt low, etc., he never dreamed he could be out of debt in that short of a period of time.

    Get out of debt…I’m all for it. But each individual needs to make up their minds as to which way they’d like to travel: via a 1850’s stagecoach or a 2008 jet. Personally, I prefer the jet.

    This is my last posting and I won’t be coming back to read your response. Discussion is one thing but you seem to be too emotionally involved to discuss this issue without it becoming personal.

  48. Tracy Coenen

    Joetta – The purpose of this site is to discuss things I’m interested in, like what a scam UFF is. It’s not your personal advertising space to push a product that is a waste of money.

    It’s funny you mention brainwashing, because it appears UFF “agents” like you have been brainwashed to think that people can’t pay extra on their mortgages without your $3,500 piece of junk. That’s simply not true. Financial discipline does not come from wasting $3,500. It comes from making changes in spending, and that can be done for free or with a very inexpensive book or program from someone like Dave Ramsey.

    And you’re right. My $20k figure is misleading. Most people reading this site will actually save more than $20k if they put their $3,500 directly to their mortgage instead of wasting it on UFF. I should really update my figure to reflect the larger figure that is the reality for so many.

    There are plenty of inexpensive software packages and spreadsheets that could do the same thing that UFF is doing. Of course, you’ve got to rely on the “secret formula” that no one could possibly do on their own,otherwise you have nothing to peddle.

    The truth is that someone could invest lest than $100 in Quicken and do the exact same thing, with less funny money and HELOC drama. All they have to do is figure out how much extra they can pay on their mortgage each month and do it. Then they decide if they want to pay the mortgage down even faster, and re-budget their lives to have more cash available to even more on the mortgage each month. Woo hoo! That advice was FREE!

    I have no doubt you’ll be back here.

    🙂

  49. Heather

    Ha ha ha ha ha ha! Thanks for the FREE advice Tracy. Priceless, no doubt. Oh, and Thank God for Dave Ramsey! I don’t need to spend time sifting through Dave’s “Dirty Laundry…” He tells us all about it. That’s his whole point! Been there, done that, got the T-shirt! If I had $3500 (which would make perfect sense– since I’m GETTING OUT OF DEBT AND HAVE NO EXTRA MONEY), I would certainly not waste it on UFF!

    Gimme a break people.

  50. rhonda turner

    yea winston and joetta…i too am a PROUD United First Financial Agent…you people need to do your due diligence…ever heard of Glenn Beck? He was our speaker recently (same weekend we were awarded the Ernst and Young Entrepreneaur of the Year award!) Mr. Beck’s opinion of our product is a positive one encouraging all 5,000 of us to take UFirst to the American People because our government certainly isn’t doing much about the economy, housing market. etc. i recently was on the air with Dave Ramsey – good ole Dave…too bad he doesn’t understand the program and give us credit where credit is due but we don’t really care!!!!! he is all about selling his “Money Makeover” – go for it! and that’s NOT a pyramid? hum, HE is at the top of his pyramid and every one who buys HIS program HE MAKES MONEY off them…he is ALL about MAKING MONEY with the products that only He, the GREAT DAVE RAMSEY endorses…i have tried to find the blog where i was on his program (just last week) but i hear he called me a “sick lady”…I have been a Realtor for ten years and have sat across closing tables and gasped when i looked at the Truth and Lending Statement (that’s the sheet of paper they usually cover up and tell you not to look at it cause it shows you how much YOU have AGREED to pay back to a lender JUST SO YOU CAN BUY A HOUSE!!! it’s SICKENING! but you do the math…that’s all UFirst is…MATH…2 + 2 DOES equal 4…Dave can’t change that and Dave still isn’t capable of doing what a computer can do…wake up America…if you don’t know how the Money Merge Account works, check it out yourself…don’t take HIS word for it…

  51. Joseph

    I’ve been doing a lot of reading about what people think about MMAs, Negative and Positive. This is my result of my reading, I’m sure you’ve done your reading and have your conclusions as well. By the way, see if you understand my thinking and logic on what UFF is and the program:
    <>

    From my readings, for most of the people opposed to UFF, it’s because of the $3500. They say the program isn’t worth that because of the fact that a person can do budgeting and planning for free on their own, or with a couple hundred dollars buy Quickbooks and budgeting books as an aid. Yes that is true in self budgeting and a good point.

    QUESTIONS I WANT ANSWERED:
    Why don’t most American’s do it on their own then? Are most UFF’s MMA users achieving their goals?

    As for now, THIS IS AN AID, JUST LIKE A COACH TO AN ATHLETE. For me, the results are what matters, did I win (achieve my goals) or did I lose (not achieve my goals)? If I win by paying $3500, then fine, result better be $0 in debt when I finish.

  52. Craig Hansen

    Joseph,

    The $3500 fee is only one part of the MMA that is offensive.

    At it’s core, the MMA is also inefficient. By published examples, it carries debt in the HELOC for the entire month – up to a minimum of $10,000 for an entire month – at the higher HELOC interest rate. This slows potential debt repayment and completely obliterates the small timing advantages of the “HELOC shuffle”.

    The MMA is dangerous. It reduces your cash flow to less than nothing because you have no cash – only debt. If your home value drops, the bank may get nervous and freeze your HELOC. Now your primary source of money to live and pay bills from is frozen. That is not good planning.

    The MMA is sold by sales people – not mortgage professionals. There is no financial degree or college diploma required. Anyone with a couple hundred bucks can sell this thing. Read some of the agent posts – you couldn’t trust some of these people to make correct change.

    I could go on, but you get the point. The MMA is a truly terrible financial product sold by a predatory company that creates a cult-like atmosphere of limitless income potential. They have an army of sales people who only believe UFF marketing and dismiss basic financial math and common sense.

  53. Craig Hansen

    Sorry Joseph, I should have addressed your actual questions as well.

    “Why don’t most American’s do it on their own then? Are most UFF’s MMA users achieving their goals?”

    All the MMA does is send all your “discretionary income” to the mortgage. The HELOC is just a smoke-and-mirrors game, but at the end of the day, 99% of the savings are due to simple prepayment of the mortgage.

    To prepay the mortgage, you need to earn more than you spend.

    Even UFF agrees:

    http://www.u1stfinancial.com/Default.aspx?tabid=118

    “Q. If I spend more than I make, will the Money Merge Account system work for me?
    A. No. If you do not make more than you spend, the Money Merge Account system is not the right option for you. ”

    So first, you have to ma make more than you spend. Anyone who does this, has the option of saving this discretionary income, or applying it to existing debts like the mortgage. In the U.S., many people decide to invest instead. Mortgage interest is tax deductible, so this is a viable option to accelerating your mortgage.

    If you decide to use the extra income to pay the mortgage, simply applying the extra to the mortgage every month will beat the MMA. Every time. Millions of people are doing this. I did it. It is not a secret, and anyone who has extra money just sitting in their bank account earning minimal interest is not being smart, but paying $3500 for the MMA just so you can do something you can already do easier and cheaper without it, is a terrible decision.

    Are MMA users achieving their goals? UFF will tell you they are. The problem is, these are reduced goals. Reduced by the $3500 paid to the UFF agent, plus interest. It can add up to $10,000 by the end of the mortgage in common cases.

    Some clients are not achieving their goals. We’ve heard from one mother of a client who lost her willpower and spend from her HELOC. She is in far worse shape than when she started.

    Also, for all the marketing hype, the MMA is not a budgeting tool. It doesn’t track your spending against a budget. It doesn’t help where most families need it.

  54. simone hardy

    So if the program were cheaper than $3500 you would approve. Then what price would you place on the money merge account for the progam to be worth homeowners getting.

  55. Jason

    I like to hear Dave telling people how to get out of debt, did he write that book while he was filling Bankruptcy for millions? I dont care about UFF either way but I dont know if Dave Ramsey would be my “go to” although, his book might be cheaper than a BK lawyer.

  56. maurice

    There has been a lot of discussion regarding accelerated mortgage programs specifically around accelerated mortgage software programs. Regarding the sell of the programs, I believe sellers of these programs are opportunist/capitalist. I do not believe paying $3500 or $350 for a software application for what I can do myself.

    However, my question concerns the validity of the underlying theory of interest arbitrage between a HELOC v. traditional fixed mortgage. I have done some calculation doing the money shuffle between the two without any software. Yes, the HELOC interest rate is higher than the mortgage, but the absolute dollar amount paid on the HELOC is substantially less than the interest paid/saved on the traditionally mortgage. If I am leveraging cheaper money, not interest rates, to reduce my principal mortgage balance and thus reducing the amount of interest paid and shortening the life of the loan…all the better…no?

    Is there something I am missing here or is the arbitrage theory valid?

  57. Tracy Coenen

    A HELOC almost always has a higher interest rate than a first mortgage, so you are not “leveraging cheaper money.” The “cost” of the money is dictated by the interest rate. So if you’ve calculated a lower cost by moving debt from a lower rate first mortgage to a higher rate HELOC, then you are doing the math wrong.

    However, I invite you to post your calculations IN FULL here so that we can show you.

  58. maurice

    Tracy Coenen,

    Every one is stuck on the interest rate. I am referring to ABSOLUTE dollar amounts vs. interest rate. For example: 20% on $100 = $20 vs. 6% on $100,000 = $6,000.

    Yes, I will incur cost from using the HELOC, but if I can cancel a significant portion of interest and shorten the life of the mortgage all the better. Now regarding the ABSOLUTE dollars paid on the HELOC, the ABSOLUTE dollar amount paid out to the HELOC is trivial incomparison to the higher ABSOLUTE tax dollars saved on the mortgage.

    This raises two questions:
    1. Do you want to incur the HELOC cost?
    2. How much ahead will I end up?

  59. Craig Hansen

    The two questions have two very simple answers:
    1. No.
    2. You won’t end up ahead. You will end up behind.

    It doesn’t matter if you’re talking interest rate, or the amount of total interest you pay over the life of the mortgage or the mortgage+HELOC. You will pay more interest with the MMA. You will end up behind.

    Once again, if you want to post numbers, we can show you exactly how far behind for a given example. But make no mistake, you will end up behind with the MMA.

  60. Tracy Coenen

    Yep, Maurice, Craig is right. (And me too.) While you’re “cancelling” interest on that first mortgage, you’re replacing it with MORE interest on the HELOC. So you’re paying more in absolute dollars.

    But I’ll invite you again to provide all the numbers you used to conclude that you’d be better off doing this. We’ll show you why you’re wrong. If you’re so certain you’re right, then why not provide the actual numbers you’re working with?

  61. maurice

    Tracey,

    Again, I’m not in favor of purchasing software or service such as MMA, UFF or other mortgage accelerator programs. However, the concept of using funds that cost less (absolute dollar not interest rates) to work harder thru the power of compounding is still intriguing. I’ve been ask show numbers to illustrate.

    Using HELOC for a 1 month cycle and comparing cost of HELOC to the interest saved over life of loan.

    No HELOC assistance
    1/1/09
    Mortgage $200K @ 6%, 30 yrs – pmt $1200
    Total interest to be paid over life of loan – $231,676.38

    Using HELOC
    1/1/09
    Mortgage $200K @ 6%, 30 yrs – pmt $1200.
    HELOC @ 8% (wellsfargo quote, interest calculated daily) draw and pay $5K to mortgage.
    On 1/31/09 deposit portion of payroll of $5K into HELOC. HELOC balance $0. Jan interest on HELOC – $34

    2/1/09
    Draw against HELOC for portion of living expenses – $2500
    2/15 deposit portion of payroll into HELOC – $2500. HELOC balance $0.
    Feb interest on HELOC – $7.66
    As a result of making this one time $3800 payment, the total interest to be paid over life of loan – $213,663.77

    Ideally, one would continue this cycle monthly. The use of the HELOC is to cover living expenses. The intent to drop HELOC balance to zero each month by depositing a portion of payroll.

    Conceptually, the use of the HELOC is to put cash to work where interest compounding has its greatest affect, on your mortgage, and to aid in living expenses in the interim.

    The interest savings $231,676.38 – $213,663.77 = $18,012.61
    Cost of Jan & Feb HELOC $41.66

    Is my math and assumptions out in left field or is there some validity in this approach?

  62. Tracy Coenen

    Maurice – You’ve fallen for their crap.

    $5,000 on your regular mortgage at 6% costs you $25 for one month.

    $5,000 on your HELOC at 8% costs you $33.33 for one month.

    By using the HELOC to do the money shuffle, you are costing yourself more.

    You’re not paying down your debt any faster by moving money from your first mortgage to your HELOC. The comparison you make is not valid. Saying you save $X over the life of your mortgage by moving debt to a HELOC that costs you $Y for one month is an improper comparison. You’re not comparing comparable numbers.

    So the bottom line is NO, there is no validity in the approach you’ve presented. The numbers are not comparable in any way.

  63. Tracy Coenen

    Oh.. And if you really want to pay $3,800 toward your mortgage to reduce what you owe and associated interest charges, then here’s my advice.

    Take your $3,800 and pay it directly to the mortgage without the ridiculous money shuffle involving the HELOC. And take the $3,500 you were going to waste on UFF and pay it to the mortgage too. You’ve just doubled your interest savings.

    Cost for my advice: FREE

  64. maurice

    Tracey,

    I said that I’M NOT INTERESTED NOR WILL I PURCHASE ANY MMA, UFF or any mortgage accelerator programs. Why are you continuing to reference that point? I will not spend any $$$ for what I can do for myself.

    Now in regards to the example I posted – If I could use my entire monthly income to pay down my mortgage I would, but I do have monthly living expense that prevent me from doing so. The use of the HELOC is an inexpensive way to help cover living expenses.

    I am open to legitimate explanations and points of flaws in the example. You have not provided anything but a interest rate comparison without regard that I’m taking a significant portion of my monthly income and applying to my mortgage that results in a significant reduction the life of the loan and a significant reduction in the interest owed while drawing on the HELOC, at $41 per month, to help cover a portion of my living expense.

    I’ve provided examples of the mortgage interest savings and cost of the HELOC: (Mortgage interest savings $231,676.38 – $213,663.77 = $18,012.61. Cost of Jan & Feb HELOC $41.66).

    I am open to explanations in the example I provided, but If you or anyone else cannot provide more explanation than an interest rate comparison, I will assume you cannot further explain the flaws or not willing to admit that there may be some legitimacy in this theory or perhaps you work for a bank because, at least in this thread, you have not identified yourself or credentials.

    At this point, I’ll seek a willing mortgage broker to help run the comparative numbers.

  65. Tracy Coenen

    Maurice – You are saying you don’t have a chunk of money to pay down your mortgage, yet in your example you said that you paid down $3,800 on your mortgage. There are only two possible ways for that to happen:

    1. You had $3,800 and paid it on the mortgage
    2. You borrowed it from a HELOC with a higher interest rate and therefore a higher cost to you. You therefore only transferred debt and didn’t pay anything down.

    Your explanation is wrong. In your original example, you actually show yourself as somehow paying off $5,000 of debt (you say your reduced the first mortgage by $5,000 AND you say the HELOC has a zero balance at the end of the same month).

    But you didn’t really pay down your debt by $5,000, as you’re saying you don’t have money to do that. What I’m saying is that your example is wrong because you somehow credited yourself with reducing your debt by $5,000 (and still having the HELOC at $0) but you really don’t have that money to do so. The savings you see in your example, are solely a result of this phantom $5,000 payment.

    You are costing yourself money by using this HELOC shuffle that doesn’t get you any further ahead than just sending a little extra money to your regular mortgage. In fact, your monthly cost to use that HELOC is higher than any interest savings that you’d gain on the regular mortgage.

  66. maurice

    Tracey,

    OK. Yes, you are correct that I started this process by drawing against the HELOC which makes it sound like I do not have $5K to start the process. My mistake.

    I do have the $5K ($1200 + $3800), but by paying all of the $5K to the mortgage leaves me with very little for living expenses. This is problem of reaching a balance between the two…clasic every day problem.

    If I take $5K from payroll ($1200 plus an additional $3800)and pay the mortgage, the affect of the additional $3800 on the mortgage is drastic – it reduces the life of the loan and reduces interest owed. I hope you agree with that.

    During the next pay cycle, I deposit $5K into the HELOC to drop it to zero – roughly 30 days of HELOC interest at a cost around $34.

    Now, at the top of the month, I’m left with very little to nothing left over for living expenses, so I draw against the HELOC of roughly $2.5K until next pay period – roughly 14 days. HELOC interest cost of approximatly $8.

    So, at the end of this cycle, I’ve taken virtually all of my payroll and applied to the mortgage and reduced the interest owed from $231,676.38 – $213,663.77 = $18,012.61. I’ve paid the HELOC back and incurred the HELOC interest from Jan & Feb HELOC of roughly $41.66.

    This doesn’t work? The problem I see with this is I don’t think you can do this consistently each month. You will need time to recover or you may dig yourself into a hole.

  67. Craig Hansen

    Maurice, take a step back for a second. You’re comparing the interest accured by the HELOC over one month, to the interest saved over the *life* of the mortgage.

    It is not a valid comparison. If the HELOC rate was equal to the mortgage rate, you might be able to find a couple bucks per month, but nothing worth the hassle and risk of a closed LOC. If you’re paying 6% for your mortgage and 8% for your HELOC, this will definitely leave you behind simply prepaying the mortgage as the money comes in to do so.

  68. Tracy Coenen

    Maurice – You’re now saying you DO have $3,800 to immediately reduce the balance of your mortgage. So do it. You still have your $1,200 for living expenses, and you don’t need the HELOC. Using the HELOC creates an unnecessary step which costs you money because of the higher interest rate. The fact that you have $3,800 to pay on debt is a separate issue from the HELOC. If you have it, pay it. The HELOC only puts you behind.

  69. maurice

    OK, OK guys. I wish we could have a live conversation regarding this because a lot is getting lost in translation. I will respond to both to Tracey’s comments and then Jeff’s.

    First, I like to thank you for your input. I think this type of forum is great…more heads are better than one…usually.

    Second, I was asked to provide numbers to illustrate and provide specifics – I did. I also provide how/mechanics of the process. But for whatever reason, people are choosing to argure small slivers of the example vs looking at the bigger picture.

    Now, perhaps, it would be good to post your background to establish a baseline/crediability. Now, I’m not asserting that I’m a genius or smarter than anyone. I’m just trying to vett this theory out. I am a high-tech product maanager, MBA with a concentration in marketing and finance.

    Tracy, it appears, but correct me if I’m wrong, that you are not reading my entire response/example. I stated that from payroll I have $5k+. I am applying $5K ($1200 mortgage payment + additional $3.8K principal)to the mortgage, but this would leave me without enough cash for monthly living expenses.

    FACT #1: By applying the $5K to the mortgage significantly reduces the life of the loan and the total interest owed by the amount previously stated: $231,676.38 – $213,663.77 = $18,012.61

    Now, to cover monthly living expenses, I’m drawing from the HELOC.

    FACT #2: 31 days interest on the $2.5K HELOC @ 8% is $16.49

    On my next payroll period, I pay back the HELOC $2,516.49. Balance from payroll: $5K – $2,516.49 = $2483.51. $2483.51 – mortgage $1200 = living expenses $1283.51

    The upside to the method, if you can sustain, is shorten mortgage life and reduced interest owed. The down side – I could not consistantly do this monthly. Also, I’m left with reduced living funds/standard of living and always going back to the HELOC. However, the cost of the HELOC for the most part is minor if you can pay it back within 30 days.

    Cheers! I think I answered my own question.

  70. Tracy Coenen

    Maurice – For the last time, your math and logic are wrong. You are showing a $5,000 reduction in debt, which you are not really making. You are also ignoring the fact that you are replacing 6% debt with 8% debt, which costs you more money. Although you appear to have a long-term savings on your 6% mortgage, that is more than offset by the higher cost of using the HELOC the way you are describing. There is nothing lost in translation. I’m not “arguing” slivers. Your math is simply wrong.

  71. Deb

    Maurice, it seems in your example you have an extra 1300 to apply long term to your mortage principle and not use the heloc….5K payroll minus 1200 mortgage and 2500 living expenses= 1300. Just use that and you don’t have to fool with the 8% heloc.

  72. maurice

    Cheers!

    On a last note before I bow out/sign off.

    I have acknowledged that I’m incurring additional cost by using the HELOC and I have stated that cost…it’s minuscule when at 8%, simple interet for 30 days! I have also illustrated the mortgage savings of the life of the loan and interest owed…it’s significant.

    One. I have offered up my background and I have ask for background credentials of responders to better understand the perspective of responses…and have yet to receive.

    Two. Just saying that you are replacing 6% with 8% without taking into account the TIME VALUE OF MONEY and the end result of using funds with DIFFERENT INTEREST RATE, DIFFERENT TIME PERIODS AND DIFFEERENT AMOUNTS is short sighted. The end result is the common denominator!

    Three. My goal of this exercise is to explore ways to maximize the reduction on the life of a loan and the amount of interest paid…maximize being the operative word. The reduction of debt as quickly as possible is by the way a good thing, but at what cost!

    With that said, of course, applying any additional funds to your mortgage payment will HELP reduce the life of the loan and interest paid, but are you Maximizing and can you Maximize?

    Thank you, and no need to respond. I will be sitting down with a FINANCIAL PLANNER to further vet this out.

  73. Tracy Coenen

    Maurice – Your calculations and comparisons are wrong. I have taken into account all the things you suggested, and you actually have not. Again, you’re comparing interest savings over the life of the mortgage to one month of interest on the HELOC. That’s not a valid comparison. You’re failing to calculate the ongoing cost of using the HELOC in the way you’re planning, which will more than negate your savings on the first mortgage. I can’t force you to look at that calculation, however.

    My credentials are all over this site, and I won’t hold myself responsible if you’re not able to scroll up or down on the page. Bless your little soul for thinking that you’ve done a great thing by using a HELOC in the way you suggest, but the simple math proves that you’re costing yourself money, not saving money. Good luck.

  74. Maurice – what is the point of ‘credentials’? Madoff had a great track record and ran a decades long Ponzi scheme. Many smart people were taken in by his ‘record’. My education in similar I believe to yours, my undergrad is BSEE, and I have an MBA with finance concentration. Now, with your smarts, you should be able to understand my guest post here regarding the HELOC shuffle.
    Let me ask you – would you rather pay me $100 today, or pay 2% interest i.e. $2, for the next 1000 years? Geez, $2000 in interest and you still owe the $100, am I crazy? This is the point that other intelligent people are still not getting across to you. Paying 5% for 5 years is much better than paying 20% for just one, on the same sum of money.
    Your examples above compare the HELOC shuffle to the original mortgage. Why not compare H-S to a regular system of prepayment? The kind one can do with my free spreadsheet, which is an amortization table showing interest saved (‘canceled’ in the vernacular of the agents) based on each month’s prepayments, or any decent online mortgage calculator. You see, the agents continue to say that their product competes with what others are peddling. That’s nonsense, because I’d not have the nerve to charge for a one page spreadsheet, and most ‘nay-sayers’ here aren’t selling anything. It’s your choice in the end. You can pay $3500 and convince yourself that it was that ‘investment’ that produced the great savings, or you can do it yourself and claim an additional $20K or so in savings. MMA doesn’t save you a nickel, it costs nearly $20K. Use some common sense and you’ll see that. You can pull a copy of my sheet thru my link above. No special request or email needed.
    Joe

  75. Robert M

    All the authors seem to have an agenda who attack programs that are helping and working for thousands of people to get out of debt. Maybe personal book sales and radio shows could be one reason. If you really want to help people with debt.Seek out the people and the companies along with trying the program before you give self righteous prononcements of condemnation of something you do not know what you are talking about.

  76. Robert, I don’t have to drink poison to prove it’s bad for me, nor would anyone in their right mind ‘try’ the program (I read that as why not first throw away $3500 before criticizing) that they are intelligent enough to see as a scam. Well over 200 people have requested a copy of my spreadsheet, free for the promise that they’d tell me if they still decided to buy the MMA software. So far only 3 people still fell for it. I’ve saved people over $700,000 so far, and still counting. MMA claim of any savings are highly exaggerated, the people who use it save from their own prepayments, not from the software. I haven’t written a book yet, but if you can find me a radio gig, I’m happy to take it.

  77. Steve

    Hello All-
    I saw Fox and Friends the other morning and they talked about a program similar to this (but for only $1,500). It sounded interesting. Basically it said that I didn’t even have to change my cash flow habits and by making the same payments that I’m making on a 30 year mortgage (we’ve paid off 6 years in the two years we’ve been making payment) that I’d pay the loan off in 5 years. Obviously, if it sounds too good to be true…
    I hate to ask others to do the work, but is there any way someone could lay out a spread sheet using the two different methods to actually show how things turn out with actual interest paid? I’d do it, but I’m terrible at math formulas and probably would compute things incorrectly. I may be where Maurice was…I’d love to see actual numbers.

    Thanks for the help- I can’t wait to “Be Debt Freeee”!

  78. Tracy Coenen

    Steve – It sounds too good to be true because it is. The only way to pay off your mortgage faster is by paying MORE to the mortgage sooner. These programs suggest you don’t have to change your spending habits, but that’s not true. The way they get you to pay off the mortgage faster is by taking all discretionary income (the money that doesn’t already go to bills) and applying it to the mortgage. If you look at the exact wording these companies use, it’s very clever… and probably doesn’t really say you don’t have to change your spending.

  79. Tracy

    I sat through Financial Peace and enjoyed it thoroughly, that was about 5 years ago, and it did not get me out of debt by one dollar. I know why, I did not implement Dave’s advise and I don’t think anyone in the class did either. I purchased an MMA from U-First 14 months ago and have reduced my mortgage considerably and saved over $27,000 in future interest. You can beat up the MMA, but it’s all about what someone will do – I think we had a 100% failure rate in Financial Peace and that’s not a slam to Dave or his concepts, but about what people will or will not do. The MMA may seem odd to people, but it’s something I will do and am doing, I will be out of debt in half the time, with financial peace I wasn’t getting out of debt at all. Sorry, but that’s the truth.

  80. Tracy Coenen

    You don’t have to apologize to us. Apologize to yourself and your family for the fact that you had to flush $3500 down the toilet before you would pay your debts down. You don’t need MMA. It adds no value. But apparently wasting $3500 is what you needed to actually start paying down those debts. (Well actually, you wasted about $20,000 when all is said and done, but hey….. who’s counting?)

  81. Tracy, buyer of MMA, can you explain the difference? Dave showed you a path to being debt free, which you made the time to attend. I understand it’s a series of classes, not a one time lecture. But after this, you ignored the advice, and lessons learned.
    What exactly makes you follow MMA, and how much time do you put into it? I mean specifically, you need to enter details of your spending, how much time per day or per week does that effort take? Why is it easier for you to follow than the Dave program?

  82. Hank K

    Thanks for the comments Tracy, I hope this thread is still open.
    I just heard of the truthinequity.com site mentioned by a guest on Fox news. my wife and I have the greatest respect for Dave Ramsey. Back in the 80s we have never heard of Dave Ramsey. We decided to pay of our credit cards and thereafter use one card and pay it off EVERY month. Works great!
    The only debt we have now is a small mortgage and we decided to pay 2-300 additional monthly on the principle. Guess what? That’s what Dave Ramsey advises!
    I had not heard of Sequence Inc but I will be reading The Fraud Files Blog from now on.

  83. Whitney

    All people have to do is go online and get an amortization calculator for free to do calculations. It is not necessary to pay $3500 to do the calculations for you. Heck, if you have it use that $3500 to pay on your principal and you will save on interest for sure. It is sad that financial companies charge so much when you can actually get a lot of information and advice for free to help you get out of debt. I have listened to D. Ramsey for several years and I have applied his advice to my financial life. It works when you spend less and apply the extra money to debt. It Really Works!

  84. debtfree.Jane

    Tracey: I have read all the posts about the MMA’s. What I would like to add is that there “used” to be what was called a “bi-weekly” loan. This was a mortgage loan wherein the borrower could pay off a fixed-rate 30 year loan off in 17 years by simply paying one-half of his monthly mortgage obligation every two weeks, instead of once monthly. An automatic payment was scheduled every two weeks from the borrower’s checking account so that the payments were done timely. The result was that you were paying the principle down two weeks sooner each month AND you were making one extra payment per year. That is a great mortgage for people who are paid every two weeks instead of twice monthly. It was also great for people who lack discipline or cannot afford the payments on a new 15-year fixed rate loan. If those loans are still available, they might be a good option for some of your followers. Many lenders don’t offer them because they hate doing without that additional 12 years of interest. But some might. It is worth a shot to try to find one.

  85. Chuck Wagon

    Typical rhetoric! It is funny reading the MMA sales person (Maurice) try to come across as Joe Consumer! $3,500 is $3,500 whether it is charged up front or disguised as a $20 payment over time!… Just like when you go and buy a Used Car! What is the first thing they sell you??? A Payment! Same thing applies here! Funny! Oh Yah….Cheers!

  86. Been thinking about these schemes for a while and here is my analysis (based on the latest of these called Replace Your Mortgage). And I, like Maurice, am ignoring the $3500 fee because you could do this on your own without paying for any software.

    The fallacious comparison these schemes make is comparing not paying anything extra on your mortgage to using their scheme which pays extra on your mortgage. That is not a fair comparison.They all assume that there is money left over at the end of the month which gets applied to the HELOC. The comparison should be between their scheme and paying that extra onto your mortgage.

    So there are several variables:

    MR = Primary mortgage interest rate
    HR = HELOC interest rate
    HC = HELOC cost, annual cost of HELOC usually $50-100 / year
    TP = Monthly Take Home Pay
    MP = Monthly mortgage payment
    ME = Monthly Expenses beyond Mortgage
    RM = Left over money, TP – MP – ME

    Scenario A – Just make your monthly mortgage payment and do nothing else

    This is the worst case and of course the one that these schemes always compare themselves against. But in reality you have RM dollars left over at the end of the month that they are applying to the mortgage so it is not a valid comparison case. Of course, these schemes ignore that you will be building up money outside of your mortgage (12 * RM per year)

    Scenario B – Apply your mortgage payment (MP) + the leftover money (RM) to your mortgage every month.

    This will of course pay your mortgage down fast and is what these accelerator schemes should compare themselves against.

    Scenario C – Get HELOC, use it to make a payment on the mortgage, Apply MP to mortgage, Apply RM to HELOC then mortgage.

    Here you have to look at the relative interest rates MR vs HR. If you can get HR MR. Let’s assume a best case of the interest rates are the same. In that case, you do not pay down the mortgage any faster than scenario B, but have the additional fee of HC. If HR > MR then you are losing money.

    So far the HELOC has bought us nothing, but we haven’t included the extra step of using the HELOC as your checking account which these programs tout.

    Scenario D – Get HELOC, use it to make a payment on the mortgage, Apply TP to HELOC, Pay MP and ME from HELOC. When HELOC is paid off lather, rinse, repeat

    This scenario seems complicated to analyze but it is easy to analyze if you realize it is exactly equivalent to Scenario C if your checking account earned the same interest rate as the HELOC and you paid the interest you earned to the HELOC. The question then is how much interest you will earn per month on this account. That is your average daily balance (ADB) * HR / 12. The best case scenario would be you get 100% of your pay on the first and all expenses were paid on the last day of the month in which case your ADB would be nearly TP. Let’s assume that expenses are spread throughout the month in which case a more realistic estimate for ADB is TP / 2.

    So with this reasoning doing the gyrations with the HELOC let’s you save a little interest that is applied to the debt. That amount is roughly TP * HR / 24. Run the numbers and you will see this is negligible. Assuming TP = $5000 and HR = 5% gives you a whopping extra $10.42 per month extra applied to the mortgage above just paying extra on your mortgage. And don’t forget that we have to pay HC every year.

    Of course we ignored lots of things like risk, and we optimistically assumed that the HELOC rate is as good as the mortgage rate and assumed that it didn’t vary (which it does).

    So I do not see how anyone can claim that this is some miraculous way to pay off your mortgage early. After going to all this trouble it might let you apply something less than $100 extra per year on your mortgage. Just stick to Scenario B and apply any leftover to your mortgage (just like Dave teaches after taking care of baby steps 1-5). The difference between that and the gyrations with the HELOC is negligible and if you factor in other things like risk, etc. non-existent.

  87. My previous comment got mangled due to my use of less than and greater than symbols. Here is what I said in Scenario C:

    If you can get HR less than MR then your best bet is to max out the HELOC, make interest only payments on the HELOC and apply RM to the mortgage. But that is not realistic as usually HR is greater than MR.

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