# How will a foreclosure affect credit?



## lwcgrad08 (Jan 17, 2013)

If i was to let my wyndham contract foreclose how bad would it affect our credit... We owe 38k... Have equity of almost 36k


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## DeniseM (Jan 17, 2013)

They will turn you over to collections, and the credit bureaus.


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## timeos2 (Jan 17, 2013)

Those numbers are not just fees due - there is a serious outstanding base loan balance due. A foreclosure on that will be a major hit similar to a home foreclosure. Avoid it if you can. 

By the way if the equity you refer to is what you paid off on the developer retail price vs the balance still due you have zero in "equity".  The resale value is a couple thousand at best - you owe $35K plus. Try to get then to accept a deed in lieu of future payments for your past payments - and good luck. You got taken as most retail buyers do,


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## Passepartout (Jan 17, 2013)

The unfortunate thing is that you owe $36K on something worth $2K at most. And from our experience, Wyndham doesn't have a good track record of accepting deed-backs. They would rather you just kept making payments.

If you default and let them foreclose, you will be turned over to collection, barred from using the TS. Unable to sell or give it away while it's in arrears. Ultimately your name will be removed from it, but not without a serious hit on your credit score. You can write a rebuttal letter for the credit agencies, and there have been discussions of the effect of a timeshare foreclosure. It may not be bad, but if you are going to be buying a home or changing employment sometime in the next 5-7 years, defaulting may not be the wisest move. If not, who knows?

Best wishes.

Jim


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## lwcgrad08 (Jan 17, 2013)

We r buying our home off my father in law and im working 90 hrs a week cause of this timeshare, 2 car loans, and student loans.... I want out cause we want to start our family.... [Personal info. deleted.]


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## DeniseM (Jan 17, 2013)

I have removed some info. from your post which you probably don't really want to share in public.

Here is the problem - you signed a contract and they are going to try to hold you to it.  If you can't afford the payments, and you don't need a good credit rating, then defaulting is an option, but it won't be pleasant and they aren't going to let you slide.


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## stevio99 (Jan 18, 2013)

Read recently on forum of someone who hired lawyer and they went over contract, and found problems, and was able to get out of contract.  Slim chance, but might be worth it.


Cant find the thread for the life of me though. might be worth your time to look around and try to find it, then get the details from the poster.


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## darius (Jan 18, 2013)

I am a mortgage professional and can tell you that a timeshare foreclosure is treated exactly the same as a full ownership foreclosure.  

Unfortunately, this means you won't be able to purchase another property for 3-7 years if you let it foreclose.   

Best of luck...


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## capital city (Jan 18, 2013)

I would not default if you have good credit. If your credit is low anyways then go for it. Good credit gives you much lower auto %, the ability to even buy a house, low interest credit cards, etc. You will pay that 36k some how in the future if you wreck your credit. 

I would keep it and do your homework on the best places to rent. I feel like the economy is coming back and people will start to vacation more which will hopefully drive up the price of our timeshares and rentals. If you rent out your reservations you will cover all your m/fs and help a little on the loan. Good luck


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## AKE (Jan 18, 2013)

If I could not afford it then I would take the hit on my credit rating.  From my perspective it is stupid to pay for something that has no value but this is only my opinion.  I would call them, tell them that you cannot afford it and tell them (not ASK them) that you are giving it back to them.  I think that you will have more luck if you are assertive then talking with them from a 'begging perspective', but again, this is only my opinion.


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