Over the last few weeks, I’ve been researching and reporting on the United First Financial Money Merge Account. UFF’s “agents” are poorly trained multi-level marketing pawns who spout company propaganda about how the MMA is the greatest thing since sliced bread.
I was recently directed for United First Financial’s FAQ page. I had seen this page before, but looked at it today with an entirely different perspective. With my research on the product nearly complete, I am able to see a number of distortions and deceptions in this page.
And the company can’t claim (like many MLMs do) that they’re a victim of independent contractors who are misrepresenting things. These are corporate’s own representations about what the product is and does.
Here’s a the UFF story paired with simple facts:
UFF: The Money Merge Account system is a powerful tool that enables homeowners to pay off a 30-year mortgage in as little as one-third of the time, without refinancing their existing mortgage or increasing minimum required monthly payments.
Fact: The MMA doesn’t “enable” you to pay off your mortgage early. You can do it for free all on your own. Just pay more, sooner. And no, you don’t “increase minimum required monthly payments” with MMA, you just add extra money to those required minimums. (How would one increase a minimum required monthly payment anyone? Call your creditor and say “Can you please increase the minimum monthly payment I must make?)
UFF: By repositioning your income against the line of credit, the line of credit lender will credit the monthly payment requirement and lower your daily average balance, thus reducing interest charges. Any money that you don’t spend, that would normally be “sitting stagnant” in your regular checking or savings account, remains against the balance of your loan until it is otherwise needed, further reducing interest charges.
Fact: What they don’t tell you is that this “repositioning” of your money saves you very little. If you had a $3,000 balance usually sitting in your checking account, you would save a maximum of $15 to $20 a month with this money shuffle. That’s sure not worth paying a $3,500 fee for the program. Nor the fees it will take to get up and running with a HELOC and keep the HELOC while you’re in the program.
UFF: Because of how the Money Merge Account system works, homeowners now utilize their unused idle money and expense money to help reduce interest charges on their line of credit until it is otherwise needed, without increasing their minimum required monthly payment.
Fact: A mortgage doesn’t get paid off early without paying more money sooner. Again, UFF uses the phrase “without increasing their minimum required monthly payment.” You don’t increase the minimum. You add to it, which means you’re paying more on the mortgage.
UFF: From a financial standpoint, there is very little risk.
Fact: This is funny. The risk with UFF is that you’re giving them $3,500. That could be used to pay down your mortgage and save you almost $20,000. DON’T DO IT.
UFF: How can a higher interest line of credit help to pay off my lower interest first mortgage? Can you give me more information on the workings of this program? When repaying a mortgage, it’s not the rate you pay that’s most important. What matters most is the total amount of interest you pay over the term of your loan. With the Money Merge Account system you use your line of credit to reduce the balance owing on your primary mortgage, blah blah blah…
Fact: It never makes sense to use debt with a higher interest rate to pay off debt at a lower interest rate. Take your $3,500 and apply it to your mortgage. You’ve already saved far more than the UFF program can ever save for you. Then when you have extra money, apply it directly to your mortgage. That’s how you pay less in interest. You don’t need UFF to do this.
28 Sep 08 at 3:49 am
Just google virgin one account. It is very close to what UFF and the Money Merge Account are based after and what they do for the average home owner. As you will learn this has been a very successful program in the UK, and has been active for over a decade with a land slide of positive response and accolades. Do a little more research into your critique; your banter only lends to your clueless awareness.
28 Sep 08 at 9:49 am
It’s not the same. VirginOne does not charge $3500 to get an account, it is not sold through a MLM force of uneducated salespeople, and no HELOC or CC is required.
The problem with the VirginOne account is that the rate is typically higher than you could achieve with a more traditional mortgage, so the savings are not that great, if they exist at all. There is no “landslide” of positive responses – some are positive, some negative.
28 Sep 08 at 4:02 pm
The virgin one account has received awards for being the top account service and top mortgage service from industry publications in the UK from 2002-2006 and there are a lot of positive remarks as to how the account has helped people. As for UFF some of the people who are selling the product might not be financial guru’s, but on the flip side there are a fair amount of people in the mortgage, and financial industry who are using it to their advantage. The reason they are using the product to their advantage is because they are financial guru’s in their respected fields and understand the full power of the product and the concept. I would ask you to do a little more research on UFF because you can spend the $3,500 to take $20,000 off in interest, but that only happens once. With this product you are constantly reducing your debt and will have the product for the rest of your life for the one time fee. There are people who have been $300,000 in debt but are now debt free because of the software. UFF has also received a share of awards from the industry. The company started less than two years ago. I would ask you to look a little closer. This is a genuine product.
28 Sep 08 at 6:12 pm
Gfunk – The consumer can save the $20,000 in interest PLUS tens of thousands more if they pay extra on their mortgage every month, just as UFF will tell them to do (except my method is free and actually saves them more money).
29 Sep 08 at 2:31 pm
Your system? What is your system again? Putting extra money towards your principle? This concept and system is “your system” on steroids which achieves the desired goal of owning your house and being debt free much faster. I doubt you offer a guaranty and assistance when needed.
29 Sep 08 at 3:02 pm
They want you to think it’s “on steroids” but the truth is that it’s expensive and time consuming, and only puts you FURTHER BEHIND because of the $3,500 fee. You could use a simple spreadsheet (or go without) and you wouldn’t need any assistance because it’s so simple.
As for the guarantee from UFF? Not worth the paper it’s written on, in my opinion. See here: http://www.sequence-inc.com/fraudfiles/2008/09/10/the-united-first-financial-limited-guarantee/
24 Apr 09 at 9:01 am
We’ll go line by line as you did with review…
1.) “Enable” doesn’t mean what you are insinuating…that someone can’t achieve something without using the product. Quite simply, it means to provide an opportunity or means to accomplish something, which this product does.
2.) This “money shuffle” isn’t calculating interest on a $3,000 balance of a checking accout (which is your example above), but a mortgage of several thousand dollars in interest charges. Are you kidding me??? You’re misrepresenting this product completely by using this example.
24 Apr 09 at 10:33 am
Michelle,
1. “Enable” is simply supplying the means to do something. The MMA doesn’t do that. You already had the means to accelerate your mortgage. The MMA supplies nothing you didn’t already have.
2. This is where you and your fellow agents prove yourselves to be weapons-grade stupid at math. One argument for using the MMA is to make use of money that would otherwise be sitting around, not working for you. Fine, says Tracy, if you have $3000 sitting in a checking account providing liquidity (which alone is a good thing), that money could be “cancelling”, at most, $15-$20 per month of mortgage interest. Those are your savings due to the MMA, at the cost of $3500 plus the interest on that (cancelling even your monthly savings above) for the life of the mortgage. All the rest of the income and expenses are the same in the MMA and non-MMA scenarios. The same money can be applied to the mortgage as extra payments. You don’t need the MMA, because it’s easier to prepay without it.