United First Financial Is Not a Scam But...
Lin Ennis
December 16, 2007
The company just wants to help Americans pay off their homes faster—and make a lot of money while being so helpful. So why are many people calling it a scam? There are websites about it, blogs about it and even a few forums discussing the scaminess—or not—of United First Financial.
United First Financial is the company behind the Money Merge Account (MMA). United First Financial, also called UFF or U-First, is not a bank nor a mortgage lender or broker. It is the company that was built specifically to support and sell a single product, the Money Merge Account.
The founders, Skyler Witman and John Washenko, have a background in the mortgage business. The UFF website says millions of dollars have been spent since 2002 hiring a mathematical engineer from GE aeronautics and developing the software integral to the MMA. That may be where the “scam” accusation first popped up. Most homeowners would probably not think of hiring an aeronautical engineer to develop algorithms to help them with early mortgage pay off.
The software is pretty spiffy. You don’t install it on your home computer; you don’t own it. The software resides on UFF’s own computers. Primarily, it adds up the income and expenses customers supply to the program, and predicts when they should move their assets—specifically home equity and paychecks—toward their expenses, namely their bills. In addition, the software predicts exactly when the customer’s home will be completely paid for, and calculates ultimate savings by using the accelerated schedule it puts them on. All of that can be done on a fairly simple free spreadsheet, such as OpenOffice. That’s probably the second reason many people think it’s a scam.
At $3500, the Money Merge Account seems outrageously priced, and it may be. But considering customers may need customer service for 10 years (the approximate time it might take to pay off a mortgage), it may not be too much at all. This, however, could be the biggest reason it’s considered a scam. That’s a lot of dough, even for the knowledge of how to pay off your home years sooner, often paying off the mortgage completely in about one third the time. However, UFF has a solution for that, too. Finance it out of the equity sitting in your home going to waste.
Sales representatives are not only instilled with missionary zeal, they are also paid well for their services, earning as much as $1000 per sale of the $3500 program. To nurture their fervor and keep overhead low, UFF’s half a dozen administrators have chosen a multilevel marketing (MLM) strategy. Reps pay a small fee to get started, and earn only commissions and bonuses, no salaries. This, believe it or not, is one of the main reasons the MMA is called a scam. People are largely suspicious of MLMs, even though they are as legitimate as a corporate hierarchical structure with paid sales reps. Over the years, every kind of business drops a few bad apples.
The basic concept of the MMA is drawing equity out of your house to pay on your mortgage, thus drastically reducing the remaining principal on your home loan. The smaller the principal, the less interest you pay. Home equity lines of credit (HELOCs) typically carry interest rates a couple percentage points higher than primary mortgages. Since the HELOC is a smaller lump sum, and since monthly income reduces it further (until time to pay bills), even the higher rate interest charges on it are nominal, for example around $30 a month for an average daily balance of $5000. Since the home mortgage balance is much higher, even a low interest rate, such as 6%, can make the monthly charges very high—about $500 a month, just interest, on a $100,000 balance! And this, dear friends, IS the biggest reason the Money Merge Account is considered a scam! People’s understanding of compound interest is so sketchy, they cannot comprehend how using money a 8% to pay off money at 6% could possibly work.
Even though I personally think you don’t need to spend $3500 to use this technique (a position the United First Financial website backs me on), it does work. It is not a scam. They recommend you do your due diligence, because it isn’t for everyone.
And get instant access to my popular mortgage savings tips. Scads of ways to reduce your mortgage interest without refinancing! You can also read more about United First Financial and their Money Merge Account from Lin Ennis, developer of the 86-page do-it-yourself manual Let Your Mortgage Make You Rich! Why should you put your banker’s kids through college instead of your own? Get the facts and pay off your home in about one third the time!
United First Financial is the company behind the Money Merge Account (MMA). United First Financial, also called UFF or U-First, is not a bank nor a mortgage lender or broker. It is the company that was built specifically to support and sell a single product, the Money Merge Account.
The founders, Skyler Witman and John Washenko, have a background in the mortgage business. The UFF website says millions of dollars have been spent since 2002 hiring a mathematical engineer from GE aeronautics and developing the software integral to the MMA. That may be where the “scam” accusation first popped up. Most homeowners would probably not think of hiring an aeronautical engineer to develop algorithms to help them with early mortgage pay off.
The software is pretty spiffy. You don’t install it on your home computer; you don’t own it. The software resides on UFF’s own computers. Primarily, it adds up the income and expenses customers supply to the program, and predicts when they should move their assets—specifically home equity and paychecks—toward their expenses, namely their bills. In addition, the software predicts exactly when the customer’s home will be completely paid for, and calculates ultimate savings by using the accelerated schedule it puts them on. All of that can be done on a fairly simple free spreadsheet, such as OpenOffice. That’s probably the second reason many people think it’s a scam.
At $3500, the Money Merge Account seems outrageously priced, and it may be. But considering customers may need customer service for 10 years (the approximate time it might take to pay off a mortgage), it may not be too much at all. This, however, could be the biggest reason it’s considered a scam. That’s a lot of dough, even for the knowledge of how to pay off your home years sooner, often paying off the mortgage completely in about one third the time. However, UFF has a solution for that, too. Finance it out of the equity sitting in your home going to waste.
Sales representatives are not only instilled with missionary zeal, they are also paid well for their services, earning as much as $1000 per sale of the $3500 program. To nurture their fervor and keep overhead low, UFF’s half a dozen administrators have chosen a multilevel marketing (MLM) strategy. Reps pay a small fee to get started, and earn only commissions and bonuses, no salaries. This, believe it or not, is one of the main reasons the MMA is called a scam. People are largely suspicious of MLMs, even though they are as legitimate as a corporate hierarchical structure with paid sales reps. Over the years, every kind of business drops a few bad apples.
The basic concept of the MMA is drawing equity out of your house to pay on your mortgage, thus drastically reducing the remaining principal on your home loan. The smaller the principal, the less interest you pay. Home equity lines of credit (HELOCs) typically carry interest rates a couple percentage points higher than primary mortgages. Since the HELOC is a smaller lump sum, and since monthly income reduces it further (until time to pay bills), even the higher rate interest charges on it are nominal, for example around $30 a month for an average daily balance of $5000. Since the home mortgage balance is much higher, even a low interest rate, such as 6%, can make the monthly charges very high—about $500 a month, just interest, on a $100,000 balance! And this, dear friends, IS the biggest reason the Money Merge Account is considered a scam! People’s understanding of compound interest is so sketchy, they cannot comprehend how using money a 8% to pay off money at 6% could possibly work.
Even though I personally think you don’t need to spend $3500 to use this technique (a position the United First Financial website backs me on), it does work. It is not a scam. They recommend you do your due diligence, because it isn’t for everyone.
And get instant access to my popular mortgage savings tips. Scads of ways to reduce your mortgage interest without refinancing! You can also read more about United First Financial and their Money Merge Account from Lin Ennis, developer of the 86-page do-it-yourself manual Let Your Mortgage Make You Rich! Why should you put your banker’s kids through college instead of your own? Get the facts and pay off your home in about one third the time!
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