Is The Ufirst Money Merge Account (MMA) a Scam?

By: Every Day Finance Tuesday, May 27, 2008 12:10 PM

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If you haven't heard about the UFirst MMA yet, you probably will soon. There's a new mortgage system out there that purports to reduce your mortgage term substantially by a complex method of using a Home Equity Line of Credit (HELOC) to manage all your finances while advancing additional prinicipal payments to your mortgage, shaving years off the term. Due to the nature of the amortization schedule for mortgages, in fact, making additional payments above and beyond your minimum monthly payment certainly reduces the life of the loan. However, this system is completely unnecessary and uses deceptive materials to trick the consumer into believing they need this "sophisticated software system" to fulfill their real estate dreams, as I'll show you. I will also highlight how much this will ACTUALLY cost you in the long run, not to mention the other more beneficial uses of your additional funds each month.

About the Company and the System: RED FLAGS

I can't really say I know much about the UFirst Financial other than this system and its agents or "associates". I can say that they employ the usual multi-level marketing scheme that many similar companies do (remember Amway, ACN and the other organizations approaching cult-like fervor in their zeal?) to get footsoldiers to sell a service or system to friends, family and co-workers, entice them to sign on as an "associate" for an entry fee and the pyramid of promises builds from there. A friend of a friend tried to entice me into dolling out the $3,800 for the system and I politely shot holes in his presentation to the point we agreed it didn't make sense for me (that was the easiest "tough sell" I've ever encountered).

In looking for the company on the Better Business Bureau's website, I found something interesting. In sifting through the page of "United First Financial"s that came up, I found that they have duplicate websites. The one that is Satisfactory with BBB is a .net address, while if you Google "UFirst MMA", the .com site comes up. The sites are very similar save for one minor detail. On the .com site (which is the one most commonly frequented by you and I), the company's location is nowhere to be found. On the .net version, which is covered under the BBB, the location is in the upper right hand corner. What's more interesting is if you click on a link to join or learn more, the .net site directs you to the .com site. Guess what else I found? Among the myriad companies that come up in the BBB search, I found one with the .com site listed as its website. Guess what it's rating is? No Rating. I wonder why that is. While this is conjecture on my part, is it possible that the .net site is there to provide for a satisfactory rating with no complaints, while the .com site handles the transactions and could potentially be affected by a poor rating? I wonder. Why wouldn't the site that handles the traffic and the transactions be listed with BBB? I can't think of another logical explanation for directing your traffic AWAY from a satisfactory site TO a site with no rating. Can you?

While perusing the site, I noticed that they make mention of their writeup in "Mortgage Planner Magazine", as if it's a resounding endorsement. What about CNN, Money Magazine and BusinessWeek? These are credentials that the Prosper.com (a true financial innovation) was able to emphasize when it was launching; UFirst can only come up with this accolade? Essentially, there is no legitimate source (major business outlet, famed economist, not even a washed up sports star in a commercial) I could find that would endorse this system.

The UFirst MMA System - Hocus Pocus

Now, for the system itself: It's all based on tricking you into the fear of large numbers by showing you the future value of dollars you'll be paying in interest payments over the life of a loan. In the video example (link below), at 3:00 in to the video, they show an example. On a 200K loan at 6% interest, you pay $1199 monthly, or $431,677 over the life of the 30 year loan.

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6/11/2008 11:38:06 AM Nice try by Trey Bowden The axom "Judge not, let ye also be judged" should be applied here. Your accusation that the MMA "associates" are involved in a typical "zealous" marketing plan should be balanced with the identification that your blog is written under the same "zealous" motivations for potential customers to invest in the stock market...and preferrably through one of your istockanalyst affiliates. Secondly, additional care should be taken when casting stones that the proper use of mortage terms be used. In the section titled, "is pre-paying your mortgage a good idea..." you stated that if the reader is early in their mortgage then the majority of their payment goes to prinicipal is incorrect. The majority goest toward interest. Thirdly, your argument against future dollars breaks down when you consider that the average home owner in America refinances their first mortgage (or buys a new home) every 5 to 7 years. Then the calculations start over. The MMA actually allows the home owner to benefit from the maximum interest reduction during these years thus increasing the total available equity in their home should they sell or refinance. Just a thought. Trey Bowden Reply Rating: (10) (13)
6/11/2008 11:38:06 AM Nice try by Trey Bowden The axom "Judge not, let ye also be judged" should be applied here. Your accusation that the MMA "associates" are involved in a typical "zealous" marketing plan should be balanced with the identification that your blog is written under the same "zealous" motivations for potential customers to invest in the stock market...and preferrably through one of your istockanalyst affiliates. Secondly, additional care should be taken when casting stones that the proper use of mortage terms be used. In the section titled, "is pre-paying your mortgage a good idea..." you stated that if the reader is early in their mortgage then the majority of their payment goes to prinicipal is incorrect. The majority goest toward interest. Thirdly, your argument against future dollars breaks down when you consider that the average home owner in America refinances their first mortgage (or buys a new home) every 5 to 7 years. Then the calculations start over. The MMA actually allows the home owner to benefit from the maximum interest reduction during these years thus increasing the total available equity in their home should they sell or refinance. Just a thought. Trey Bowden Reply Rating: (0) (4)
2/12/2009 4:33:38 PM Rebuttal by EverydayFinance 1) Speaking from my personal experience with a zealous associate, the attacks I've sustained at Everyday Finance from other associates that troll the internet for any critique on the service, and the readily available data regarding the actual service, I believe my opinions are valid. I readily correct any factual inaccuracies - if evident, feel free to visit the site and I'll update upon request. 2) Regarding statement: 'your blog is written under the same "zealous" motivations for potential customers to invest in the stock market...and preferrably through one of your istockanalyst affiliates.' - I'm not sure I follow. I'm not affiliated with istockanalyst in any way other than that I had allowed them to syndicate my content from my source feed at EverydayFinance after they approached me, which is pretty common. I'm also syndicated at SeekingAlpha, Reuters, Yahoo, USAToday, Alltop and more. Conversely, bloggers sometimes do derive benefit from writing a positive review and subsequent clickthroughs on an ad, but a negative review has little or no financial benefit since it has the opposite effect of enticing a reader to purchase a good or service. I just wanted to voice my opinion on the matter...nothing more. 3) The prinicipal/interest topic was clearly a typo/gaffe; I routinely post about amortization, NPV and the like, I've generated my own amortization cash flow calculators and more through both my MBA and for fun. By considering the context, any informed reader would ascertain the intent of the passage. 4) Regarding statment: 'The MMA actually allows the home owner to benefit from the maximum interest reduction during these years thus increasing the total available equity in their home should they sell or refinance.' - I don't challenge the simple notion that by making additional payments along the way, mortgage payment period is reduced. I challenge the fact that you have to pay an exhorbitant fee, of which a sizable portion goes to "associates" like yourself, for something that could easily be done manually. Don't forget those HELOC costs as well. Reply Rating: (5) (0)
2/25/2009 8:13:21 PM Misinterpretations by JimmyDaGeek I'm glad to see that Trey didn't write that mortgages are front-loaded, too. It's true that for the first few years, most of the money paid goes towards interest. But that's because that's when you owe the most amount of money. Anyone can prepay their mortgage balance - you don't need software to do that. But what does that have to do with people moving every 5 to 7 years? Banks will give you a 25 year mortgage at the 30 year interest rate, so technically it's possible not to "lose" any of your payoff. But, practically speaking, when most people move, they move to something more expensive and they also lose a chunk of equity to the selling process, so even if they wanted to buy their house again, they would have to come up with extra cash. But let's forget that argument. If you don't prepay your mortgage and put that money into an investment, the belief is that you will come out ahead in the long term because of a greater investment return, regardless whether you stayed in your house or kept moving. Of course, that argument sort of breaks down these days, but we are talking long-term. But, wait. What about all those people that prepaid their mortgage, only to see the value of their house drop, destroying their equity. What happens to these people if they lost income? Are they going to borrow it from their house with a home equity loan? How are they going to pay it back? Reply Rating: (4) (0)
9/19/2009 1:40:37 AM Early in the mortgage, payments go to interest- not principle by Paul Strauss ...::"For the sake of argument, let's say you're in a 30 year mortgage at 6% like the video portrays. If you're in the 25% tax bracket and you're early in the mortgage, the majority of your payments go toward principal, so you're getting a tax break of say, 20% on your payments."::... Did you mean to say that early in the mortgage, the majority of your payments go towards interest? Ammortization tables I have all show this to be the case. Reply Rating: (2) (0)

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The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.

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