More MMA nonsense... (sigh....)

dave_donhoffJanuary 18, 2007

PEOPLE! If you have an argument about responses inside a thread, POST YOUR ARGUMENTS ON THAT THREAD!!!

If you MUST, you can even start a NEW thread.

DO NOT (I repeat, DO NOT) contact any particular individual on an unsolicited basis merely to argue something when absolutely nothing you have to say is sensitive nor private!!!

Case in point;

I just received a private email argument from someone (who I will refrain from outing completely... his initials are A.P., so you know who I am speaking of.)

Here's the content, with my responses;

Clearly you don't get how the MMA works. You must have discretionary income for this to work for any one. Most people disciplined or not, do not have one or more months income laying around, and If they do, most people are not going to pay down their mortgage with it unless they can have access to it if they need it.

So, RIGHT off the bat you are acknowledging that this "system" is beyond effective use of MOST people.

This is where the HELOC comes in to play. For example, if you are making $10,000 per month with $1000 of discretionary income this program will direct you to send $10,000 to your first mortgage. You income will zero this HELOC balance and will you spend you budget over the next 30 days. Pay your bills late, before you incur a late charge, pay your impounds your self at the end of the year, float as much as possible on a credit card for 28 days before you pay interest on it and you will beat a mortgage calculator using $1000 per month to your principle every month on average by 20%. Whether the rate on the HELOC is 8% or 24% will make little difference because your average daily balance on the HELOC is so low that there may be a few months difference in the pay off time.

EVERYTHING you just described can be done for free... no $3,500 memberships or subscritions or software is required.

The use of a mortgage calculator shows you will pay off the 30 year mortgage 6 months ahead of the MMA software. The actual use of the software will pay off your mortgage 6 YEARS EARLIER than the mortgage calculator on a 30 year loan.

No it will not. This 'software' can't bend the basics of math. Anyone who can auto-deposit their paycheck to their mortgage, and then "sip out the dollars" as late as allowable can accomplish the SAME results without any $3,500 'software' program.

FURTHER... anyone taking this path is 'winning' at the wrong battle! They end up accelerating the elimination of the single most powerful aspect of their retirement planning; Their tax-preferred home equity leverage!

Financial efforts to accelerate payments are far better spent building equity OUTSIDE of your residential real estate. Extra dollars in THIS direction will set you ahead, and hold you safer.

I wrote to you because of your title, Strategic Equity & Mortgage Planner. When & if you 'get it" you will see this as a valuable tool to be used in certain instances to help your clients.

This is a stupid financial scheme for anyone with an ounce of financial common sense and discipline. I cannot think of ANY situation where this might be appropriate, compared to safer family financial management methods.

What are your fee's for managing a million dollars?

For equity and investment management, our firm is only paid on results... if our clients are earning profits, we aren't paid.

The MMA fee is $3,500, one time!

Pretty expensive for something that hurts the finances rather than helping.

Best regards,


All around smarty pants

OK... A.P., if you really think this plan is a good idea, please explain;

A) What is the software specifically doing that CAN NOT be done by someone without the software, for free?

B) If you SUCCEED, and eliminate your mortgage faster... how is that beeter than to have accelerated the accumulation of tax-deferred retirement investments instead?


Dave Donhoff

Strategic Equity & Mortgage Planner

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GO Dave !!!!!
I love it when people think they can "pull one over on folks"
yet don't realize that they can be "called on it"

thank you for alerting people to this scam

    Bookmark   January 18, 2007 at 1:47PM
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DOH!!! Correction;

For equity and investment management, our firm is only paid on results... if our clients are NOT earning profits, we aren't paid.

    Bookmark   January 18, 2007 at 2:04PM
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A substantial difference in that correction - the amended situation sounds somewhat more reasonable, I'd say.

ole joyful

P.S. Sometimes it's a good idea to take a good look at ourselves in the mirror ...

... and run some of our cock-a-mamy ideas past someone(s) that we know with his/her head screwed on well ...

... before we go shooting our mouth off.

May prove less embarrassing, in the end.

o j

    Bookmark   January 18, 2007 at 8:21PM
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What does MMA stand for? I thought it was for Medicare Modernization Act, which is the now infamous Part D. Kindly emlighten me. I am curious.

    Bookmark   January 19, 2007 at 6:28PM
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Dave - I had to take a moment to chime in here.

I have been been reading presentations of this MMA concept over the last year from several sources and under various brand names. I feel most uncomfortable with the nature of the "zealots" messages I have seen. Any time I see that type of fanatic passion in a message, it typically means there is something I am missing and that something is ending up in the fanatic's pocket.

I work as a branch manager/mortgage consultant for a national lender (hint = stagecoach). We as well as other larger lenders have HELOCS that will permit usage as defined in the MMA concept. (for free...) We have probably looked at this as a "product" but have decided to put resources in other places for now.

The point that many miss is the underlying need for the discretionary income and the discipline that makes this concept possible. How many clients do you have, who have taken interest only products in the past 5 years, who have paid nothing to the principle, nor invested the difference?(here comes the flood of reasons why they should be in this program...) This does not make this a "bad" concept, but not the financial salvation that many present it to be. Paint me as a skeptic for now.....

Your commentary over the time I have read this forum is appreciated and typically right on the money.

    Bookmark   January 30, 2007 at 2:39PM
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Hi James,
You may have noticed in another thread I pointed out that your bank, along with Chase, US Bank, and National City (that I know of) all offer 1st lien HELOCs that can be used for a DIY version of this strategy.

Wells & Chase both definitely offer linked checking, debt & Visa accounts... maybe US Bank too (not sure, but wouldn't be surprised.)

The WORST thing is... this is simply the wrong approach. It is the structured discipline of putting the borrower at a continually greater risk of insolvency, loss, and foreclosure... one dollar at a time, one month at a time.

Just exactly as with taking money on a vacation to Las Vegas... "Saving" your money by burying it in at-risk real estate equity is irresponsible for anyone who cannot afford to lose their equity.

Dave Donhoff
Strategic Equity & Mortgage Planner

    Bookmark   January 30, 2007 at 4:20PM
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Since I am not buying or selling, I do appreciate the information you give. It is informative and educational, even though I don't always understand the "words". Guess as a Senior, I need to keep on top on things when and if I do sell

    Bookmark   January 30, 2007 at 8:30PM
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Dave, not being ugly just curious. Why do you have your e-mail address on all your posts? Of course i know i can be e-mailed through GW. I just would'nt want my e-mail so public.

Sounds like you give good advice on all this stuff.

    Bookmark   February 4, 2007 at 9:31PM
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Hi Vickie,

Why do you have your e-mail address on all your posts? Of course i know i can be e-mailed through GW. I just would'nt want my e-mail so public.

I participate non-anonymously (not just email address, but real name) because I tend to expose and explain things that are far bigger than anyone should consider valid from any anonymous internet poster. I want people to know they can look me up independently (they don't have to call or email me, but are always welcome to,) to check me out for credibility & background (if ever in question.)

Sounds like you give good advice on all this stuff.

I try to make it worthy of signing my name... thanks!

Dave Donhoff
Strategic Equity & Mortgage Planner

    Bookmark   February 4, 2007 at 9:49PM
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It seems to me that if someone at the beginning of a 30 year mortgage, took the $3500 that they were thinking of "investing" in the MMA software and applied it to their mortgage, without doing anything else, they would knock years off the life of the mortgage.

    Bookmark   February 6, 2007 at 7:13AM
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(shhhhhh.... you're spoiling their plot!)

Dave Donhoff
Strategic Equity & Mortgage Planner

    Bookmark   February 6, 2007 at 2:17PM
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But Sharon ...

... how do you arrange to use the money to pay down the mortgage from the beginning ...

... and also use the same money to buy/pay rent on the software??

Seems to me that the propagandists pitchin' the program have a steeper hill to climb.

ole joyful

    Bookmark   February 6, 2007 at 8:16PM
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Hmm.. Where'd the other listing go? (

I put some effort into a response there.. And now it's saying "missing file".


Btw, go Dave, go! lol

They keep saying that their program would pay off a mortgage 20% faster and giving other vague figures that mean nothing, and yet why are there no examples given to compare their program to simply paying off to the principle each month?

Now, I figured out a plan that might save someone some extra cash (but I don't think it's worth it). If you are willing to put $1,000 extra towards mortgage principle each month, just save $1,000 the first month and hold it in your bank account, then pay $2,000 on your credit card. By the next month, you should have a total of $2,000 saved to pay off the credit card without paying interest. Then repeat the procedure. This way, every two months, you you pay off $1,000 one month ahead of time repeatedly over the lifetime of your mortgage. For a 6% loan, this will save you about $5 extra every two months. That's $30 a year! lol (This is only because of the no interest loan though.. If you incur finance charges or pay credit card fees of any kind, then you'll have to subtract that from your "profit." Oh, if you use a Citibank Dividends card, you'll make 1% on the purchase, which will bring it up to $25 every two months, or $150 a year. You will, of course, be putting yourself at risk if you cannot pay the $2,000 at the end of the 2nd month.

    Bookmark   February 8, 2007 at 1:55AM
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Ok, I understand about directing extra money to investments where possible. But what about people like my husband and I who would like to retire in 6 years on a fixed income WITHOUT a mortgage payment? Seems that the MMA philosophy in this case would be right on....especially since we have 27 more years left on our mortgage.

    Bookmark   February 13, 2007 at 7:20PM
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Cynthia A,

Yeah - but why not just do it on your own?

You have something else between your ears but cheese, don't you?

If you pay down your mortgage principal by the $3,500. that those guys want for their software and to hold your hand (and they got theirs up front, so if you malinger, suffer layoff, get waylaid by robbers, ... whatever - no skin off of their nose) you'll reduce the number of years that your mortgage will run somewhat.

It seems to me also that they want to redirect a good bit of your formerly discretionary spending into paying down your mortgage.

More or less along the line of - you pay all of your paycheque into the mortgage monthly, then pull money on the HELOC to live on. And they'll probably want you to justify what you're spending on much more than you're doing now, when you indulge yourself somewhat, every now and again ...

... well, maybe fairly often.

Seems to me that these guys aren't the tooth fairy - one way or the other, you'll be paying off your mortgage. They sure as heck won't be.

A smart financial advisor or any accountant will show you how to work your own program - for probably about $200. , maybe less.

Then - it'll be up to you to produce the self-discipline to make it work.

If you don't, look yourself in the eye in the bathroom mirror, take out your lipstick and write, "S-T-U-P-I-D" across the image of your face. That shouldn't be too hard.

Self-indulgence has a price.

These guys don't have any magic bullet.

Good wishes for finding a way to get this financial job done, and done well, relying on your own resources and skills, learning a few extra as necessary.

ole joyful

    Bookmark   February 14, 2007 at 1:06AM
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Although I am skeptical about this program, I do think I should correct what I think is a small error on Ole Joyful's part.

He says:

"More or less along the line of - you pay all of your paycheque into the mortgage monthly, then pull money on the HELOC to live on."

My impression is that the correct statement would be:

"You pay all of your paycheque into the HELOC, then pull money from the HELOC to live on and pay your mortgage. When you get close to paying off your HELOC, you borrow more money from it and put it toward paying off additional principal on the mortgage."

Aside from that quibble, I agree with what Ole Joyful said.

    Bookmark   February 14, 2007 at 11:07AM
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