Did you know that homeowners paid or will pay 580% interest in the first year of their 30 year mortgage?

Neither did I. But a Realtor in Mobile, Alabama wanted to enlighten the public and Dave Ramsey about this and tried convince us that United First Financial’s $3,500 computer software was worth every penny.

This is probably one of my longest posts. Mainly because it contains the transcript of a call to The Dave Ramsey Show on Monday, July the 7th in the 51st minute of the 2nd hour. For all of you who live in Mobile, Alabama and are looking for a realtor, beware of this woman:

Dave: “51 minutes after the hour, Rhonda is in Moblie. Hey Rhonda, what’s up?”

Rhonda: [chuckles]

Dave: “Rhonda, how are you?”

Rhonda: “I’m fine how are you?”

Dave: “Good, how can I help?”

Rhonda: “Um, I’m just a bit curious here. Um, I know that you teach, um, the principal of paying off your mortgage and being debt free..”

Dave: “I do.”

Rhonda: “..and that’s what everybody needs to be.”

Dave: “Mm heh”

Rhonda: “Um, but I’ve also heard you blast the United First Financial program and I just am wondering ..”

Dave: “I just finished blasting them”

Rhonda: “I know.. I heard you and I think you’re incorrect sir. And I just want to know, has anybody ever shown you how this works? Because it is not a ‘magical’ software, it is mathematical..”

Dave: “It’s useless.”

Rhonda: “..not magical.”

Rhonda: “And it is helping homeowners, in this country, save their homes from going into foreclosure..”

Dave: “No it’s not.”

Rhonda: “Yes it is.”

Dave: “Oh, that’s bull.”

Rhonda: “Well, okay. Is Earnst & Young reputable to you?”

Dave: “Baby doll..Earnst & Young hasn’t got anything to do with this.”

Rhonda: “Earnst & Young has named the company Entrepreneur of the Year”

Dave: “Basically, software does not keep people’s homes out of foreclosure.”

Dave: “Listen .. listen .. I know you’re caught in the multilevel cult thing..”

Rhonda: “It is not multilevel..”

Dave: “Yes it is!”

Rhonda: “You don’t know what you’re talking about!”

Dave: “Absolutely I do!”

Rhonda: “You do not know what you’re talking about.”

Dave: “Lady, you got .. do you not recruit people to go into your business?”

Rhonda: “Absolutely not!”

Dave: “You don’t recruit a soul to go into your business?”

Rhonda: “No. I do not recruit anyone. I show .. a software product ..”

Dave: “You’re business does..United First Financial recruits people .. they recruit .. they have hierarchies.”

Rhonda: “No they don’t Dave. You don’t know, that’s why I’m asking you, I challenge you..”

Dave: “I challenge you. I’ve been all through your website. It’s exactly what you say you do.”

Rhonda: “No, it helps people ..”

Dave: “No, no, no .. you recruit people ..”

Rhonda: “No, I do not recruit anybody .. all I do .. is share this with people .. and, then whenever they get on the program ..”

Dave: “.. to sell. Well, maybe you didn’t, but the business model is.”

Rhonda: “.. and see how much, how fast that they’re paying off their mortgage ..”

Dave: “It’s not paying off their mortgage, they are.”

Rhonda: “Of course they are. I mean ..”

Dave: “Do you know how they’re doing it?”

Rhonda: “.. the program doesn’t do anything except analyze ..”

Dave: “.. cause them to manage their money”

Rhonda: “.. your set of numbers, because everybody’s numbers are different. It simply calculates, because our brains cannot do that fast enough ..”

Dave: “Oh, we can’t use our brains..”

Rhonda: “.. and it tells you when is the most opportune time to utilize your money, not the bank’s money, but your money .. that equity is the homeowner’s money ..”

Dave: “Wait a minute .. stop a second ..”

Rhonda: “.. and if they’ve got equity in their home ..”

Dave: “.. stop a second ..”

Rhonda: “.. why can’t they use it whenever a, uh, state of the art ..”

Dave: “State of the art?”

Rhonda: “.. state of the art, computer program says, “Okay, Mr Ramsey, if you transfer this amount of money right now, straight to principal, you’re gonna save 7.6 years ..””

Dave: “Did you know that’s a lie?”

Rhonda: “I don’t think you can do that in your head ..”

Dave: “Did you know that that’s a lie?”

Rhonda: “No it is not.”

Dave: “Yes it is darling. The way a Fannie Mae mortgage works ..”

Rhonda: “Are you calling me a liar?”

Dave: “Yes I am.”

Rhonda: “Well, then you’re a liar .. you’re telling Americans ..”

Dave: “I’m just saying that a Fannie Mae mortgage, and FHA mortgage and a VA mortgage ..”

Rhonda: “.. that this is a rip-off ..”

Dave: “If you’ll listen a second lady, a Fannie Mae mortgage and a VA mortgage does not apply anything instantaneously based on .. based on a piece of computer software. The way you save on interest is once a month. They will not apply principal more than once a month. And there’s not a magical date that’s instantaneous ..”

Rhonda: “I know .. that’s why this program was invented.”

Dave: “That’s a lie.”

Rhonda: “No it’s not.”

Dave: “That’s a lie. That’s the way the mortgages work.”

Rhonda: [inaudible]

Dave: “I’ve been in the business for thirty years lady ..”

Rhonda: “Well, I’ve been a realtor for about twelve ..”

Dave: “.. You don’t have a clue what you’re talking about. You’ve joined a multilevel, you believed everything they told you.”

Rhonda: “And I just know people get into debt. I think that you’re objection to it is that..”

Dave: “$3500 wasted ..”

Rhonda: “.. you’re not making money off of it.”

Dave: “.. is my objection to it. It’s $3500 wasted.”

Rhonda: “No it’s not.”

Dave: “You don’t get anything for the $3500.”

Rhonda: “It is a personalized computer program ..”

Dave: “Whoopee ”

Rhonda: “.. that will get you out of debt.”

Dave: “No it won’t ..”

Rhonda: “Yes it does .. it works!”

Dave: “You get you out of debt by living on less than you make.”

Rhonda: “No sir, it’s not about how much you make.”

Dave: “Yes it is.”

Rhonda: “It’s the fact that I don’t really think you understand how it works.”

Dave: “I absolutely understand how it works. I’ve been through the whole thing in detail.”

Rhonda: “You couldn’t and then get on the air and tell Americans, “oh that’s a rip-off””

Dave: “[chuckles] It is a total scam.”

Rhonda: “This company is .. is .. it’s only been around two years.”

Dave: “It’s a total scam.”

Rhonda: “No it is not.”

Dave: “It’ll be gone in two more years.”

Rhonda: “And for all of the American listeners go to u1st.com and .. I had hoped that I would get somewhere with you, because I’ve listened to you for several years, and I like you, okay? But, I do wonder, has anybody ever really shown you how this works?”

Dave: “Well, no, I haven’t attended your multilevel meeting I can promise you that ..”

Rhonda: “We don’t have multilevel meetings.”

Dave: “.. but we’ve been through every piece of the detail that you’re company will put out. Listen, the simple fact is this, when you buy $3500 worth of software, you still have to live on less than you make in order to apply principal, is that correct?”

Rhonda: “That would be correct in any situation of course.”

Dave: “Okay, so .. why does the software help?”

Rhonda: “Because you get to be your bank. You get to use your money, and you get to stop paying all the interest .. when you buy .. when you get a mortgage you know that the first year on a thirty-year traditional $100,000 mortgage, you’re paying 580% interest. They’re not paying 6%.”

Dave: “That is not true.”

Rhonda: “It is true.”

Dave: “You do not pay 580% the first year.”

Rhonda: “I’ve learned this from my real estate business.”

Dave: “You don’t know how to do math lady.”

Rhonda: “Oh .. okay, okay ..”

Dave: “It’s a simple amortization schedule. Now, an amortization schedule is based on simple interest. Anybody that’s got a finance degree can understand this.”

Rhonda: “This is .. no ..”

Dave: “You don’t even have to have a finance degree to understand it.”

Rhonda: “I have been a realtor with Remax for 10 years okay, and I know what I’m talking about.”

Dave: “No you don’t. I hope to God nobody buys a house from you if you think that 580% interest is what somebody gets charged in the first thirty years.”

Rhonda: “In the first year of the mortgage ..”

Dave: “In the first year of the mortgage the interest rate is five .. the effective yield is 580%?”

Rhonda: “They don’t pay anything towards principal, what $5 a payment goes to to principal?”

Dave: “Do you know why?”

Rhonda: “This is about canceling the interest ..”

Dave: “Do you not know how an amortization schedule works and you’ve been a realtor for eight years?”

Rhonda: “I do know how an amortization schedule works, yes ..”

Dave: “How does it work?”

Rhonda: “It shows you how much interest you’re paying out ..”

Dave: “It shows you how much .. and how much”

Rhonda: “.. and when it ..”

Dave: “And how much of the interest, in the first payment of 360 payments on a thirty year .. how is the interest calculated in the first payment?”

Rhonda: “It is compounded interest ..”

Dave: “No, it is not compounded ..”

Rhonda: ” Yes it is.”

Dave: “It is calculated in amortization schedule on a simple interest basis, that’s how an amortization schedule is developed. You take the .. you take the”

Rhonda: “I’m not .. I just wanted to know ..”

Dave: “.. let me tell you how it works. Let me explain to you how it works.”

Rhonda: “.. if you really knew what u1st was ..”

Dave: “Listen, you need to go back and do the math, ’cause here’s how it works ..”

Rhonda: “No .. I would like for you to ..”

Dave: “You take the interest rate and divide it by twelve .. do what?”

Rhonda: “I would like for you to look at the program again.”

Dave: “I don’t need to look at it again. It’s a total scam.”

Rhonda: “Okay ..”

Dave: “It’s a waste of $3500 of the consumers good money.”

Rhonda: “No, it’s the best $3500 ever spent. If you save $80,000 ..”

Dave: “You save $80,000 ..”

Rhonda: “.. by saving interest ..”

Dave: “.. by getting out of debt early. Lady, you are thick. You are truly thick. You need to get out of the multilevel cult and use your brain again. When you tell people 580% interest in the first year, it really shows your ignorance. It’s really sad. That puts this hour of The Dave Ramsey Show in the books.”