Yes, Utah is the hotbed for scams and fraudulent activity. One of the recent ones I have heard about is the Money Merge Account created by United First Financial (located in Bluffdale, Utah). They charge you $3,500 to basically tell you to use your discretionay money to pre-pay the principle on your home mortgage. What a scam! However, there are 3 things you should know about these Money Merge Accounts:
1) You are NOT buying software. You buy the the ability to log in to a website the manage your finances online, which only displays results on the data that you give it (information about your mortgage, your other debts, income, living expenses, etc.). Since you are not buying software, you do not own anything.
2) It doesn’t NOT perform any action for you. The MMA does not pay off your mortgage for you. It doesn’t move any money. It doesn’t set up the home equity line of credit (HELOC). It doesn’t pay your bills. All the website does is perform calculations on data that you entered. The calculations do not account for random events relating to emotional fears or emergency situations. The calculations simply tell you when to pay your bills, which is something you can do yourself and save $3,500.
3) It is something you can do on your own. In fact, in answer to the this question: “Can I do this concept on my own?” right on their website, United First Financial says the answer is, “Absolutely.” The simple math that they don’t tell you is this: Income – Expenses = discretionary money. Now use the discretionary money each month to pre-pay your mortgage principle. Depending on how much discretionary money you have available each month will determine how quickly you pay off your mortgage. For most people, this would cut their 30-year mortage in half.
Related posts:
Great Analysis! The Money Merge Account is just an extra $3,500 for something that you can do yourself. All the MMA does is transfer money out of your equity into a line of credit (additional debt), then pays that line of credit with your income. It then tells you to use discretionary money (income – regular expenses = discretionary money) to pay off down the principle on your mortgage. So, bottom line, you can save yourself $3,500 as well as the trouble of opening a line credit and do it yourself by paying extra discretionary money towards your principle.
By applying a chunk of money to your mortgage principal sooner rather than later (bit by bit), the mortgage interest savings pile up faster. $3500 is a lot of money for a fancy prompt!
I have a few friends that have recently been pitched this “program” and I’m amazed that they have actually been persuaded to consider it. The agents out in the field are still telling the story that you are “using the banks money” to pay off your mortgage and they try to make it seem like the whole thing is some sort of secret that many smart people just don’t seem to get. Fact of the matter is United first is a clever MLM marketing scam, that has the interesting ability to get really good people drinking the kool-aid and falling in line like some sort of alien invasion movie. It’s scary how gullible people are.
My wife and I got suckered into this scam in Northern Az through a referral from someone. The guy who met with us seemed on the up and up and was very convincing so we bit like hungry trout in the early months of spring. What a waste of money and time. The so called program is highly complex and difficult to use. Don’t waste your money because you can accomplish what they offer on your own for free!
Simple fact is that if you want to get out of debt and pay off your creditors (including your mortgage), you will have to make a lifestyle change to do so.
The only way possible is to pay MORE than the MINIMUM amount. The mortgage payment you pay each month for your house is only the minimum amount. If you want to get it paid off quickly, you have to pay more than that. This REQUIRES a change in lifestyle!
I’m still amazed at how easily these ignorant and gullible people fall prey to scams like this.
David,
You are absolutely right. People that are looking at the Money Merge Account should consider reading my post on Paying Off Your Mortgage Early.
I’ve been following the MMA dialog for over 6 months. To me, it’s sad that people are so confused by simple math, they’ll believe anything. They allow themselves to be convinced that paying their debts off, highest rate to lowest, is an impossible task, requires a computer the help them line up the right order. Hmmm, do I pay off my 18% credit card or my 2% student loan? I must need some $3500 piece od software to help me through this decision.