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Author Topic: Money Merge Accounts - scam or for real?  (Read 65508 times)

Offline kdhastedt

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Re:Money Merge Accounts - scam or for real?
« Reply #30 on: November 13, 2006, 09:52:38 am »

Thanx Jaime...I have modified/deleted the more offending portions of your posts as it went along...

Please just be cognizant of the rules in future posts.  Thank you for your willing compliance in keeping the Forums a positive experience for all users!

Keith
I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline hnrozin

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Re:Money Merge Accounts - scam or for real?
« Reply #31 on: November 14, 2006, 08:26:58 pm »
I think Jaime may have some good points, but they got lost for me in his arrogant attitude and desire to belittle other opinions.  Jaime, please try to stick to the fact and be kind to others!  Your phrasing attitude made you sound like a huckster trying to score a big commission instead of a thoughtful person worth trusting.

 Having said that, I saw the MMA video on line, but still don't understand how it works.  It seems like I am paying down more of my conventional balance each month than my discretionary money could pay down.  How does that happen?  The 2 page analysis a sales person ran for me did not explain it.  Any ideas here?  

Offline Rancho Funding

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Re:Money Merge Accounts - scam or for real?
« Reply #32 on: November 14, 2006, 09:07:18 pm »
Hopefully I can answer your question as unbiased as possible. As I have stated above, I carry all three major mortgage acceleration products therefore I can fully compare and contrast all three.

All "mortgage acceleration" programs work off the same principle, banking out of a current debt. Why carry a positive balance in a savings account at 0-1% when you can reduce a current debt at 6-9% interest.

The only thing that allows you to create this type of banking out of a debt is a simple interest loan. A simple interest loan is a loan where interest is calculated on the daily balance. So when you apply a priciple payment in the middle of the month you will not pay interest on it for the rest of the month. Currently all simple interest mortgages are monthly adjustable rate mortgages.

The Home Ownership Accelerator and Macquarie Asset Manager both utilize this by refinancing your current mortgage into their program which is a HELOC 1st Mortgage. A HELOC is better know as a Home Equity Line of Credit.

The MMA program utilizes ones conventional or compound interest loan that is currently in place and adds a HELOC for the banking aspect. The MMA software precisely calculates your deposits, spending and savings to minimize the amount of debt carried on the HELOC and deposit any extra available principle as soon as possible to the 1st mortgage.

Each programs has its positives and negative and only an individuals scenario can determine which product will work better for them. Here are just some rough examples I have seen in the past few months.

Home Ownership Accelerator
1st mortgage is due for refinance anyway
Borrower want to relend money in the future

Macquarie Asset Manager
1st mortgage is due for refinance and one of the following:
3-4 units
Investment property
>90%Loan to Value

Money Merge Account
has current fixed mortgage at good rate
wants to accelerate pay off with no risk
(because this is sofware and not a mortgage it has an mlm agent program. This agent program does not require you to buy the software. Many are attracted more to this product because of the ability for resale. If a different product fits you personally better, you can do the better product and still be an agent for United First Financial the parent company of the Money Merge account.)
« Last Edit: November 14, 2006, 09:18:42 pm by Rancho Funding »

Offline hnrozin

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Re:Money Merge Accounts - scam or for real?
« Reply #33 on: November 15, 2006, 05:39:10 am »
Thank you for the informative reply.  I especially appreciate the comparison of like products.  As a matter of principle, I have concerns about any product sold via MLM, however, I will try to get over that if it is actually the best choice for me.  Here is my situation:

I live in GA, have 3 quads on conventional loans, plus several properties on interest only loans.  I would like to use my business income / expenses as the "household" financial picture.  I do not have any desire to pay of my home mortgage or put a HELOC on my primary residence.   Do you recommend any particular product to accelerate the mortgage pay down?  I would be pleased to discuss this further off line.  By the way, I filled out a form from the Rancho website last night.  Is that you?


 

Offline Jaime Buckley

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Re:Money Merge Accounts - scam or for real?
« Reply #34 on: November 15, 2006, 09:40:57 am »
I apologize for a portion of my conduct, to be sure, but please don't mistake arrogance for passion. I am not attacking or belittling others opinions hnrozin--I was simply talking about basic principles, and was   challenged on them when I stated I did not agree. I was told the other ways were 'smarter'--and I just didn't see it that way: an opinion. I have said time and again that no one system or product will work for everyone (which INCLUDES MMA), and you need to make your own decision.

So, my apologies to you hnrozin---but it was passion, not arrogance...for I know there are more educated people on this board than I am. I was simply standing by a belief, as are you, by making that judgement of me.

I appreciate the detailed comparrison of Rancho Funding in the last post, and wanted to add something for consideration:

One of the hard things to gauge with the MMA program, is taking into account the actual dollar amounts being cancelled on the back end. It's not as simple as telling a client that he/she will cancel interest at 6-9% (though Rancho is right)...you can't actually show/see what's being cancelled in dollar amounts on the back end through the software, nor through the free analysis you give a client.

A scary thing that was brought to me, from someone who used the 'austrailian' version of this type of program, is a 1st position variable mortgage / HELOC, can wipe out the average consumer who doesn't have a great deal of discretionary income. Even a slight rise in interest can eat up all your discretionary income and bury you. Those with high discretionary incomes don't seem to have the problem, but thought it was worth mentioning.

Anyway, just thought that might be useful to you. Appreciate the comparrisons of products.
Just use what's best for you, and ask a lot of questions while you do your homework.
Jaime Buckley
Co-Founder
www.TheJubileeProject.org
"Setting the working man free."
801-208-9492

Offline Rancho Funding

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Re:Money Merge Accounts - scam or for real?
« Reply #35 on: November 15, 2006, 10:18:22 am »
Jamie,

You are absolutely correct. This is why I carry all 3 products. Just as you stated, and I cannot stress enough, it is on a case by case depending on these top variables: cash flow, savings, current mortgage situation, future plans.

Since the Home Ownership Accelerator has very strict guidelines only about 20% of people will qualify for the program: 24 states, >660 FICO, <90%LTV, 1-2 units, owner occupied or second home. Macquarie is more flexible but has much more risk involved: 26 states, >660 FICO, 100%LTV, investment ok, 1-4 units... but your lifetime interest rate cap is 21%. MMA is available in 49 states and to 80% of homeowners because all you need to be able to do is qualify for a HELOC or use one you currently have in place. Aside from the working concept and mlm program, this is why everyone is starting to hear about this so quick.

hnrozin,
You hit on a point I forgot to. Jamie please give feedback if you can find a falter in this thought. The Home Ownership Accelerator excels for small business owners or people with access to a lot of cash flow monthly. This is because you have a single 1st mortgage based off 1-Month LIBOR with a margin between .75 and 3.25. This means your effective interest rate is between 6 and 8.5%. When you pay down a large chunk of that from savings, business cash flow, property tax savings or any other source you are not tying the money up. You can relend it at the same exact interest rate. Using the MMA, you would actually be making that large payment as a principle payment to your conventional 1st mortgage, tying the money up, and subject to the interest rate on the HELOC when you redraw the funds throughout the month, every quarter, or yearly. HELOC are almost all based off prime and carry the legal cap of 21% for life. This puts you at an effective rate currently somewhere between 8 and 13%.

Now with just the limited information that you gave, you actually only have 1 maybe 2 options. THe Home Ownership Accelerator is out becasue they are not yet availabale in GA and it is not available at all on investment properties. THe Macquarie is availabale but there are substantial riskes involved becasue of the structure.  

hnrozin I fall underneath the corporate umbrella of Rancho Funding. You can find me be my signature or sending a PM if you have something for offline.
« Last Edit: November 15, 2006, 10:31:26 am by Rancho Funding »

Offline Jaime Buckley

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Re:Money Merge Accounts - scam or for real?
« Reply #36 on: November 15, 2006, 12:12:20 pm »
Quote
Jamie please give feedback if you can find a falter in this thought. The Home Ownership Accelerator excels for small business owners or people with access to a lot of cash flow monthly. This is because you have a single 1st mortgage based off 1-Month LIBOR with a margin between .75 and 3.25. This means your effective interest rate is between 6 and 8.5%. When you pay down a large chunk of that from savings, business cash flow, property tax savings or any other source you are not tying the money up. You can relend it at the same exact interest rate. Using the MMA, you would actually be making that large payment as a principle payment to your conventional 1st mortgage, tying the money up, and subject to the interest rate on the HELOC when you redraw the funds throughout the month, every quarter, or yearly. HELOC are almost all based off prime and carry the legal cap of 21% for life. This puts you at an effective rate currently somewhere between 8 and 13%.

I don't see any fault in this at all. In fact, I think I can clarify it even more:
MMA's are not actively used at this time on commercial properties, period (as of this posting). It's not that it won't work, and there are good points made above, but rather because United First Financial makes sure it does test marketing first, before bringing something to clients. They shoot at their own system and software, and make sure it's on solid ground before talking to mom and pop America, and I have the utmost respect for that (being a client).

A mortgage is a mortgage, but I was told, last Monday in the home office, that MMA's are not offered on commercial properties...yet. They said they will open that door in 6-12 months. They have their plates full with the homeowners, and have no need to jump into another arena.

I think Rancho Fundings info is very useful...and you know what---I'm happy I finally get to AGREE with someone here!

Everything is a case by case situation.
  ;)
Jaime Buckley
Co-Founder
www.TheJubileeProject.org
"Setting the working man free."
801-208-9492

Offline rkim777

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Re:Money Merge Accounts - scam or for real?
« Reply #37 on: November 16, 2006, 02:22:51 am »
Hi,

Has anyone heard of a Money Merge Account.  It is presented as a way to pay down your primary mortgage through an equity line of credit, taking the upside of a simple interest calculation v. compound interest.  Just curious if it was a scam?

All theory aside in this discussion as I'm not smart enough to understand any of these other posts, I was at a boot camp in April where T. J. Marrs, one of the speakers and national gurus, appears to sell a program just like what you describe.  If I recall, it was $1297 which included software to optimize the savings on your mortgage loan if you replaced it with a HELOC or other line of credit.

I didn't purchase the T. J. Marrs program but this type of system (no matter who's system you use) seems to make a lot of sense since you are paying principal first in contrast to paying interest first as done with traditionally amortized mortgages.
Robert Kim
Homeowner Solutions, LLC
Exchange ideas and investing tools at our Real Estate Mastermind Group on Yahoo Groups:
http://tinyurl.com/ypue7o

Offline christopher w

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Re:Money Merge Accounts - scam or for real?
« Reply #38 on: November 19, 2006, 08:26:55 am »
Brooke,

Just read about you and your program on MSN. Here is the link if you have not seen it.

http://articles.moneycentral.msn.com/Banking/HomeFinancing/ANewWayToPayOffYourHouse.aspx
Christopher W
C-214.923.5781

Offline riobjj

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Re:Money Merge Accounts - scam or for real?
« Reply #39 on: November 21, 2006, 01:51:57 pm »
 The deduction for home-mortgage interest only saves you taxes on a fraction of the total payment. The objective of the deduction is to encourage homeownership over renting, but it never makes sense to incur a mortgage in excess of your lifestyle needs.

Mortgage interest is an itemized deduction. Itemized deductions are in lieu of the standard deduction afforded to everyone. If you have enough itemized deductions that exceed the standard, you save a fraction of those deductions in taxes. That fraction depends on your tax bracket, which varies between 15 percent and 35 percent, depending on your taxable income. If you pay $1,000 a month in interest, and your annual income is more than $325,000, the most the Internal Revenue Service gives you back is $350. Whereas if you eliminate the $1,000, you save $650.

Some itemized deductions cannot be eliminated, such as state and local income taxes and property taxes. Some folks feel good making charitable contributions and choose not to eliminate those; some folks have high medical bills and employee business expenses that are unavoidable. But if you can provide yourself with a $325,000 home that is almost paid off, you don't have that outflow of the mortgage payment every month, which is a bigger savings than the tax savings. So the answer is revealed in this question: Whom do you want to make richer -- yourself or the bank?
Quote


Makes sense to me... The MMA program looks good, I really don't see a flaw in it.  You can make an argument about anything, but I'd rather own my home instead of paying hundereds of thousands of dollars to the bank over the 30 year term of the loan, or using my home as an ATM and refinancing every couple of years and blowing 3-5% in closing costs each time.  Besides, we don't have appreciation on our side like we had back in 2002-2005, and we probably won't for a long time.
The savings with the MMA aren't fractional, as long as you can see the big picture.

Another thing about the MMA is that the program works even better for people in Neg-Amortizing (Option Arm) and Interest Only Loans, because those loans free up so much monthly cash flow so you can drop that into the HELOC and attack the 1st Mtg.  Otherwise, those loans will never, EVER EVER be paid off!

MMA can also work well for Owners of Apartment Buildings because of the Rent Rolls, which provide incredible amounts of monthly cash flow.  There may be better alternatives, but the MMA in my opinion is best for the average person...
 
I'm looking to offer this program to all my potential and past clients.

discuss.....
« Last Edit: November 21, 2006, 01:53:54 pm by riobjj »

Offline christopher w

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Re:Money Merge Accounts - scam or for real?
« Reply #40 on: November 21, 2006, 02:23:58 pm »
Rio,

So what happens when the average person hits retirement age and starts withdrawing from their IRA's and 401K's and has no tax write-off for the mortgage on their home? They get socked with a huge amount of taxes on the money that they are withdrawing.

Instead of pre-paying their mortgage they would be better served to put that money into tax advantaged investemnts that will compound and grow through the years. I posted a link to white paper that was done by the Federal Reserve Bank of Chicago which explains it all in balck and white. Congrats on your first posting.
Christopher W
C-214.923.5781

Offline riobjj

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Re:Money Merge Accounts - scam or for real?
« Reply #41 on: November 21, 2006, 07:23:17 pm »
Hey Christopher,


So are you saying to keep your mortgage for the life of the term along with your IRA's and 401k's, pay a hundred, two hundred, or three hundred thousand dollars in interest just to save a few thousand dollars a year on taxes from money withdrawn?  Maybe i'm not following correctly, but I'm not sure thats a good thing.   I don't think the tax hit would be greater than the actual mortgage payments.  Good point though, i guess it would depend on how much they take out for expenditures..

How about keeping your IRA's, 401k's, AND pay off your mtg early? (You can invest after your house is paid off or simultaneously in an IRA, Roth IRA, 401k, etc..) If you have a Roth IRA for 5yrs, I don't think you get taxed on the money withdrawn (but that's a whole other topic)

As far as a Real Esate, There is NO real money saving advantage with in regards to tax deduction when buying a house if you're paying 200%-300% of the actual value of the home over the 30/yr term.

Look, I'm not saying this MMA program is for everybody, but I think it makes sense and it could be useful to alot of people.  Being a Mortgage Broker, my job for a long time has been to put people in debt, now I have a chance to help them get out of debt.  I don't see anything wrong with that, maybe there are other alternatives that could better suit some people, but I think if you asked the average American across the country if they really want to have thier home paid off in half the time, I bet they would say yes.  It's a comfortable and psychological benefit that adds peace of mind.

However, If the homeowner decides to sell in 3, 5, or 10 yrs down the road, they've accumulated much more equity, saved an incredible amount money on interest, and will ultimately put themselves in a better situation towards thier next purchase and/or investments.

My point is that paying off your mortgage and avoiding interest IS ALSO MAKING YOUR MONEY WORK FOR YOU.  If your paying interest that you don't have to, your essentially stealing from yourself...



 
« Last Edit: November 21, 2006, 08:05:57 pm by riobjj »

Offline Jaime Buckley

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Re:Money Merge Accounts - scam or for real?
« Reply #42 on: November 22, 2006, 06:48:59 pm »
***sighs***

... passes the torch to riobjj,

bows to the new runner,

...then walks away...



I'm going to work with the people who want what the MMA offers.
Best regards to all of you and God Bless.

Jaime Buckley
Co-Founder of The Jubilee project.org
Jaime Buckley
Co-Founder
www.TheJubileeProject.org
"Setting the working man free."
801-208-9492

Offline Rancho Funding

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Re:Money Merge Accounts - scam or for real?
« Reply #43 on: November 22, 2006, 07:21:09 pm »
One last clarification.

While the theory of tax deduction and reinvestment hold true in our beautiful taxed free country it is not simple to do and most(80%+?) donít not strategically use this.  

When thinking about this today it dawned on me that the theory behind the controversial strategy of keeping mortgage debt is almost identical to the formerly controversial strategy of interest cancellation.

The MMA has been able to make it possible for your average American to use the proven system of interest cancellation. Here is one for you smart financial and web guys. Create a fail safe web based software system that maximizes your mortgage interest while balancing the re-investment of those funds in a non-taxable investment. Make sure it monitors and gauges that the investment is at least breaking you even and has recommendations on where to transfer your money to if you are about to fall into the red.

With all the controversy over this is why the MMA program is gaining so much popularity. UFF has produced a systematic program for the other 80% of the Americans to maximize their current money.

Happy Turkey Day,

Brooke

Offline stikkee

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Re:Money Merge Accounts - scam or for real?
« Reply #44 on: December 01, 2006, 06:39:23 pm »
I must say that the MMA is the best thing since sliced bread.  All this talk about tax write offs as a solid reason to continue being a mortgage slave is just stupid.  There are dozens of other ways to get around the tax problem.  For example, go down to your county or city hall and get a business license.  Register yourself as a sole proprietor for something and write off everything.  Why anyone in their right mind would want to keep a mortgage opposed to living free in clear is mind boggling to me and most people.  Yes, if the money merge account was not an option or never created then I would understand maintaining a small mortgage balance.  But now it's here, and by golly take advantage of it!

Thanks
Stikkee

 




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