Money Merge Account – Is it true it can payoff my mortgage in 7-10 years?
Money merge account programs have two camps. You are either a loyal believer (so loyal you would defend the program to your death) or you think it is a total scam.
Money merge accounts were pushed to every mortgage originator out there as soon as the refinances started to dry up. I see United First Financial or UFirst Money Merge Account often. It is a complicated program. Sound familiar? How many people are in foreclosure right now because an originator sold them a complicated mortgage?
Money Merge Account Question
Here’s the question…
“I love this blog. I couldn’t see this question and answer anywhere. If I missed it, let me know. I was selling some items at a flea market yesterday, and a lady came up appearing interested in my booth. She said she had no money, and proceeded to solicit me regarding a cut you mortgage time in half.
It sounds like she is a representative of a program and has called her business ABC’s of Mortgage Acceleration. She handed me a flyer and said she would give me a commission if I signed up on the program which cost $1650.00. The program is suppose to tell you what time of month to pay various debts (mortgage, credit cards, etc) which is to pay your loans off quicker.
I AM NOT SPENDING $1650.00 on this program, but I wondered what you know about this.
I am starting to hear ads on the radio about this type of thing. The question is do you know anything about this program, and is this a scam that other people should be alerted?
Thanks,
Debbie”
Like everything that sounds “to good to be true” this type of mortgage acceleration is also to good to be true. These supposed “new” methods to liquidate your mortgage in half the time or in as little at seven years is called the Money Merge Accounts or MMA for short.
Money Merge Account Scam
The theory goes like this:
Manage your mortgage by getting a new home equity line of credit (HELOC) which only charges interest on the outstanding monthly balance. Since this is true, one could borrow money on the HELOC to pay down the first mortgage and then manage the HELOC balance through a complex bill paying structure. This leveraging of the way HELOCs versus first mortgages calculate interest could be used to minimize total interest owed with careful management.
As with most scams, a little bit of truth is necessary to sell the mark. But the MMA folks just used up all their truth right there. Yes, a HELOC charges interest a different way. However, can one really conclude an actionable difference exists that is so powerful the average home owner can pay off their mortgage in seven years?
Absolutely not…it’s ridiculous to even suggest it.
Banks are in the business of extracting more money from you, not less. If the banks had a loan product on the shelf (home equity loans) that killed the income from one of their most successful products (first mortgages), they’d pull it off the shelf.
Money Merge Account Software
MMA’s require a new HELOC and $4,000 software to “manage” everything. This is just when banks are cancelling Home Equity Lines in record numbers due to dropping home values. An obvious limitation tosses this program out before it ever gets out of the gate.
But even if you can get the HELOC, I would NOT suggest a money merge account to pay your mortgage off early. Who wants to go into more debt to buy their overpriced software (anywhere from $1600 up to $6,000) and be restricted by the system to funneling all bill paying and all income through the new HELOC? There are a ton more requirements for the system to work as advertised most of which the average home owner could never complete.
This money merge account system is ugly and is really just a way for loan starved originators to move into selling overpriced software and HELOC’s since bona fide home buying and refinancing has dried up completely.
The only real way to pay off your mortgage early is to pay extra principal yourself. We have an Early Payoff Mortgage Calculator so you can do that…for free!
Thanks for the question!
Author: The Mortgage Insider
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Tagged with: Money Merge Account • Mortgage Acceleration • Scam • Software
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I to have been taken, all it did was to get me deeper in debt, we paid off my boat and a small credit card balance then my financial planner by the way great job decided to put in 30k in an annuity now were looking at 70 k in the heloc before I have even started. I put my pay check in every other week as requested by the MMA but buy the time you pay your bills with the heloc your no farther along. You have to put in a whole lot more money then you make to keep it satisfied. And what they dont tell you when you sign up is that the heloc has to be almost at a zero balance before it promps you to pay on the mortgage.Then you start over until the next time I see now way now how this could work .One expensive lesson
Greg,
Sorry to hear your “lesson learned the hard way”…I try to warn folks with this post. Thanks for help out others via your commnet.
Good Luck
Based on the views expressed here, what do you think of the Speed Equity System – S.E.S., by Harj Gill? This program still requires a HELOC but is less expensive in the long run than the MMA.
If it requires a HELOC all my concerns about MMA apply to that program as well. You can’t borrow your way out of debt. It’s that simple.
Rob’s post should separate the issue into two parts:
1) The price of the MMA software, arguably overpriced
2) The concept of using an open-ended loan to speed up paying off a closed-ended loan
I’ve used #2 to pay off a considerable amount of my mortgage already and am on track to pay it off in 12 years; not the 7 to 10 year figure often quoted but still a LOT better than 27 years when I began 2 years ago.
The use of a HELOC to pay bills can seem complicated to those who have not done it. I pay all of my bills using my regular online bill pay option with my regular bank. So that hasn’t changed.
What has changed is that when my paycheck comes in, I deposit it into the HELOC. Once a week, I draw money out of the HELOC and put it into my regular account to pay bills. Not so complicated now, is it?
Tom,
“Complicated” is not my only criticism of the program. My biggest criticism is the ineffectiveness of this prepayment plan over a simpler version I developed. The purported benefits of MMA are way overblown…by the literature they use and the marketing methods using former loan officers prone to hyperbole.
The income and debt examples they use are ridiculously high so they can in fact “prove” a mortgage payoff in 7 years. This disingenuous type of “heads I win, tails you lose” marketing is used to create headlines for advertising that compromise truth in exchange for more sales. I have told the mortgage industry for years if you have to lie or “fudge the numbers” to get clients, you are doing something wrong. So, stop it.
You even admit the “pay off your mortgage in 7 years” business is a bunch of bull…12 years is not 7 years. I can show you a way to payoff a 30 year mortgage in 12 years without buying software or borrowing more money on a HELOC, or having to change virtually everything you do with your debts and paychecks.
It’s all “smoke and mirrors” and if you were caught by the “software sellers” and their fancy charts and graphs that coerced you into shelling out thousands of dollars…I feel for you. Now you have to defend your decision…we all would.
But since this blog is about education and uncovering advertising lies…I have to let the readers know there is serious concerns about the market methods, the market message, the “real world” efficacy of the plan, and the people who sell the MMA.
Thanks for stopping by…
Excellent post, I agree with you 10000%. MMA’s are just overpriced software that won’t assist 99% of the people who buy it.
I’m writing a post and will be linking back to yours as a reference, just fyi.
Take care,
The Upfront Mortgage Broker
Joe Bartolotta