# Wyndham slapped with penalty for lying during sales presentations



## TUGBrian (Feb 1, 2016)

forgive me if this is in an existing thread, I just saw it:

http://www.mcall.com/news/local/watchdog/mc-wyndham-timeshare-sales-watchdog-20160130-column.html



> The Better Business Bureau has received about 1,700 complaints against Wyndham Vacation Ownership in the past three years.


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## alexadeparis (Feb 1, 2016)

Maybe this is why they started the Ovation program? To offset some of these type of complaints about being told there is a buyback program.


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## pedro47 (Feb 1, 2016)

I hope this is the start of a domino effect in the timeshare industry.


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## dominidude (Feb 2, 2016)

pedro47 said:


> I hope this is the start of a domino effect in the timeshare industry.



http://themetapicture.com/dominos-effect-by-jim-gaffigan/


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## presley (Feb 2, 2016)

Looks like a wrist slap, but better than nothing.


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## comicbookman (Feb 2, 2016)

alexadeparis said:


> Maybe this is why they started the Ovation program? To offset some of these type of complaints about being told there is a buyback program.



Ovation is a brilliant way for Wyndham to acquire, at almost no cost, inventory they can then sell at full retail.  They can also spin it as "helping" their long time owners.  It is amazing it took them this long to come up with the program.


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## dominidude (Feb 2, 2016)

comicbookman said:


> Ovation is a brilliant way for Wyndham to acquire, at almost no cost, inventory they can then sell at full retail.  They can also spin it as "helping" their long time owners.  It is amazing it took them this long to come up with the program.



Not really. In most markets, while the timeshare belongs to someone, management at least has some hope that maintenance fees will be paid. The minute management acquires it, the TS becomes dead weight, unable to be turned into a revenue producing unit until another sucker comes along and buys the timeshare.

There are exceptions, of course, such as timeshares in very desirable resorts at very desirable times of the year, but those are the exceptions.  For the most part, however, timeshare developers get a really good deal, and everyone else (i.e., the owners who buy from the developer) get a raw deal.


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## vacationhopeful (Feb 2, 2016)

Unpaid MFs for deeded weeks and deeded CWA points get absorbed by the HOAs. Other owners are paying for those MFs ... not Wyndham.


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## raygo123 (Feb 2, 2016)

vacationhopeful said:


> Unpaid MFs for deeded weeks and deeded CWA points get absorbed by the HOAs. Other owners are paying for those MFs ... not Wyndham.


To the tune of $3.6 million(bad debt budget line).  On the points I own, that's $65.00 per year(source 2016 CWA budget).  That's more than what Wyndham charges for their mgmt. and reservation fees.(2.6).  

Question, are you saying if Wyndham takes back a deed, or points converted, that the HOA is still liable for the MFs?

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## comicbookman (Feb 2, 2016)

dominidude said:


> Not really. In most markets, while the timeshare belongs to someone, management at least has some hope that maintenance fees will be paid. The minute management acquires it, the TS becomes dead weight, unable to be turned into a revenue producing unit until another sucker comes along and buys the timeshare.
> 
> There are exceptions, of course, such as timeshares in very desirable resorts at very desirable times of the year, but those are the exceptions. For the most part, however, timeshare developers get a really good deal, and everyone else (i.e., the owners who buy from the developer) get a raw deal.



Wyndham can roll the deeds it takes back (remember they are selective, they don't take just any deed) into CWA.  even though they must pay the MF's until sold, it is cheaper than building new units.


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## jasonv1 (Feb 2, 2016)

Disney learned this with DVC. 

When Orange County (FL) holds public foreclosure auctions for DVC deeds almost every time DVC ends up the high bidder. The turn around and sell the points (again) for mid-100s/each, which is (in most cases, newer DVC properties excluded) more than they sold for in the first place.

There is an article on a DVC-specific website about this; don't want to link it as I assume it is a no-no to do so.

Wyndham just takes them off your hand, which is better on the front end but obviously more difficult to sell again (compared to DVC).



comicbookman said:


> Wyndham can roll the deeds it takes back (remember they are selective, they don't take just any deed) into CWA.  even though they must pay the MF's until sold, it is cheaper than building new units.


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## vacationhopeful (Feb 2, 2016)

comicbookman said:


> Wyndham can roll the deeds it takes back (remember they are selective, they don't take just any deed) into CWA.  even though *they* must pay the MF's until sold, it is cheaper than building new units.



*They* being the HOAs.

Several years ago, I had a sit down with a resort manager where I owned. At that time, the resort had a LOT of all weeks inventory that had spent years going thru the legal process of foreclosure. CWA was really NEW and was not being offered for sale at many resorts. I was specifically asking to buy the Fixed Weeks from the HOA ... resort manager TOLD me, NOT ALLOWED. The HOA spent thousands of dollars on legal fees and costs, got NO MFs for years and when CWA asked, had an agreement to provide a DEED for 1 week to CWA for the grand total of $1. "Just in Time" ... basically when points got sold in CWA, a percentage of NEW points was "brought" from the different HOAs to cover that newly sold ownership. Wyndham/CWA would take ALL deeds .. hence, Wyndham SOLD the HOAs on ONLY sales could be to Wyndham ... not current owners even. 

And so, the HOAs take the "hit".

PS Reminder: Converted Fixed Weeks MFs are paid a YEAR in advance ... so if a owner stops paying the CWP/CWA dues  ... the MFs on the converted week are totally paid for the current USE YEAR.


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## Angela5svr (Feb 3, 2016)

*What they do*

Let's get this clear ovation program is not buyback but giving your paid udine feed back to Wyndham at selected resorts.  They do this to avoid others getting free inventory and use it as apart of their massive in house rental/ hotel operating within the owner resorts.  They also bulk sell undesired deeds to resale brokers but usually unwanted inventory or delinquent.  It takes them a year to recycle the deed before it can be resold.  If you want out don't further fuel their greed!  I know a great make a wish charity that will take!  





dominidude said:


> Not really. In most markets, while the timeshare belongs to someone, management at least has some hope that maintenance fees will be paid. The minute management acquires it, the TS becomes dead weight, unable to be turned into a revenue producing unit until another sucker comes along and buys the timeshare.
> 
> There are exceptions, of course, such as timeshares in very desirable resorts at very desirable times of the year, but those are the exceptions.  For the most part, however, timeshare developers get a really good deal, and everyone else (i.e., the owners who buy from the developer) get a raw deal.


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## vacationhopeful (Feb 3, 2016)

raygo123 said:


> T....
> Question, are you saying if Wyndham takes back a deed, or points converted, that the HOA is still liable for the MFs?



I learn that from a resort manager ... the HOA paid to foreclose on the deeds, the deeds were just sitting in the HOA inventory and the HOA was prevented by the management contract Wyndham had with them (the legal governing board is the HOA) ... they COULD NOT sell, gift or transfer any deed .. other than Wyndham. 

So if the resorts' MF cost totally $1000 dollars and there were 100 deeds originally issued, the MFs should be $10 for each deed. But if only 50 deeds are NOT held by the HOA, then each deed had a liablilty of $1000/50 = $20 MFs. If it cost $50 to reacquire each non-paying deed, then the resort's operation cost is NOW $3500 ($1000 normal operating costs and $2500 forclosure costs) divided among the 50 active deeds or $70 per deed.

Wyndham's contract did not have WYNDHAM paying even a PENNY to the HOA for costs ... JUST a $1 consideration for a Clean Deed. WHEN they wanted the inventory on their books. CWA was just being "seeded"... the older resorts/HOAs (the fixed week resorts) were the "seed" funding of inventory. 

And YES, that $1 value of deed being transfer was the TOTAL SUM Corporate Wyndham was paying for the inventory. Sales of CWA points was like "printing money".


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## comicbookman (Feb 3, 2016)

vacationhopeful said:


> I learn that from a resort manager ... the HOA paid to foreclose on the deeds, the deeds were just sitting in the HOA inventory and the HOA was prevented by the management contract Wyndham had with them (the legal governing board is the HOA) ... they COULD NOT sell, gift or transfer any deed .. other than Wyndham.
> 
> So if the resorts' MF cost totally $1000 dollars and there were 100 deeds originally issued, the MFs should be $10 for each deed. But if only 50 deeds are NOT held by the HOA, then each deed had a liablilty of $1000/50 = $20 MFs. If it cost $50 to reacquire each non-paying deed, then the resort's operation cost is NOW $3500 ($1000 normal operating costs and $2500 forclosure costs) divided among the 50 active deeds or $70 per deed.
> 
> ...



Ovation is different from foreclosure.  With Ovation Wyndham takes my name off the deed and puts theirs on it.  They become the new owner and are responsible for the MF's.  Wyndham generally, cannot foreclose for unpaid MF's (unpaid loans absolutely), the HOA has to do it (Wyndham may do it for them, for a fee of course)  Ovation is a transfer of ownership from me to Wyndham, along with all the obligations that entails.


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## raygo123 (Feb 3, 2016)

vacationhopeful said:


> I learn that from a resort manager ... the HOA paid to foreclose on the deeds, the deeds were just sitting in the HOA inventory and the HOA was prevented by the management contract Wyndham had with them (the legal governing board is the HOA) ... they COULD NOT sell, gift or transfer any deed .. other than Wyndham.
> 
> So if the resorts' MF cost totally $1000 dollars and there were 100 deeds originally issued, the MFs should be $10 for each deed. But if only 50 deeds are NOT held by the HOA, then each deed had a liablilty of $1000/50 = $20 MFs. If it cost $50 to reacquire each non-paying deed, then the resort's operation cost is NOW $3500 ($1000 normal operating costs and $2500 forclosure costs) divided among the 50 active deeds or $70 per deed.
> 
> ...


Interesting. So, if Wyndham does not take them, they just sit there? I wonder if that could be considered restraint of trade.  Bad debt is costing me $65/ yr according to CWA budget.  Now, I am wondering if I'm missing even more money.  Do you have any idea if those deeds, foreclosed and held by HOA, are simply taken out of the total, same with points, then MFs calculated by the remaining number of deeds or points?
In other words, if the HOA owns 5 out of 50 deeds, are all expenses now decided by 45 rather than 50?



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## CO skier (Feb 3, 2016)

vacationhopeful said:


> I learn that from a resort manager ... the HOA paid to foreclose on the deeds, the deeds were just sitting in the HOA inventory and the HOA was prevented by the management contract Wyndham had with them (the legal governing board is the HOA) ... they COULD NOT sell, gift or transfer any deed .. other than Wyndham.


That is not how it works if the resort has signed a CWA Agreement with Wyndham (and it is difficult to believe what you describe could be the case at any resort).

This is a good example of how CWA foreclosures work:

*As of July 31, 2015 our Foreclosure report shows 278 accounts submitted since inception for various degrees of processing. Out of these, we have 13 accounts brought current, 2 accounts in bankruptcy, 1 account less than 12 months past due and in collections, 7 accounts past due of less than $500.00, and 58 accounts in Deed in lieu completed of which we are receiving maintenance fees from Wyndham Club Access. This leaves 195 accounts currently in foreclosure processing through Wyndham Club access. As these are completed, these accounts will be incorporated into Wyndham Club Access and we will get our maintenance fees from them. *

The foreclosures are deeded directly to Wyndham Club Access, not the HOA.  I am not positive, but I think Wyndham pays the delinquent MF at the conclusion of the foreclosure process as well as the ongoing MF.  The HOA definitely does not get stuck with the deed until Wyndham decides they want it.


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## am1 (Feb 3, 2016)

What are the default rates for retail buyers compared to resale buyers that already own at the resort?



vacationhopeful said:


> I learn that from a resort manager ... the HOA paid to foreclose on the deeds, the deeds were just sitting in the HOA inventory and the HOA was prevented by the management contract Wyndham had with them (the legal governing board is the HOA) ... they COULD NOT sell, gift or transfer any deed .. other than Wyndham.
> 
> So if the resorts' MF cost totally $1000 dollars and there were 100 deeds originally issued, the MFs should be $10 for each deed. But if only 50 deeds are NOT held by the HOA, then each deed had a liablilty of $1000/50 = $20 MFs. If it cost $50 to reacquire each non-paying deed, then the resort's operation cost is NOW $3500 ($1000 normal operating costs and $2500 forclosure costs) divided among the 50 active deeds or $70 per deed.
> 
> ...


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## vacationhopeful (Feb 3, 2016)

CO skier said:


> That is not how it works if the resort has signed a CWA Agreement with Wyndham (and it is difficult to believe what you describe could be the case at any resort).
> 
> This is a good example of how CWA foreclosures work:
> 
> ...



I believe the passage you are quoting is the procedure for CWA ownerships. CWA has a very short window of time to actually dump a member and terminate their "ownership". CWA is a club and the CLUB owns and holds the deeds for the individual resorts. Owners within CWA hold a membership certificate WHICH is revoked for non-payment of loan or maintenance fees.


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## CO skier (Feb 3, 2016)

vacationhopeful said:


> I believe the passage you are quoting is the procedure for CWA ownerships. CWA has a very short window of time to actually dump a member and terminate their "ownership". CWA is a club and the CLUB owns and holds the deeds for the individual resorts. Owners within CWA hold a membership certificate WHICH is revoked for non-payment of loan or maintenance fees.


No, this is the procedure for foreclosed fixed weeks and (non-CWA) UDI  that are folded into Club Wyndham Access.  All these foreclosed deeds are deeded into CWA, so the HOAs no longer have any deeds to offer to other owners.

It has done wonders for the annual budget.

There is obviously no "deed in lieu" for CWA memberships.


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## raygo123 (Feb 4, 2016)

CO skier said:


> No, this is the procedure for foreclosed fixed weeks and (non-CWA) UDI  that are folded into Club Wyndham Access.  All these foreclosed deeds are deeded into CWA, so the HOAs no longer have any deeds to offer to other owners.
> 
> It has done wonders for the annual budget.
> 
> There is obviously no "deed in lieu" for CWA memberships.


Yea, I said that once about the deeded property being transfered over, across trusts, for lack of another term, and was told it doesn't and can't ever happen.  

One gets bigger the other smaller.  Maybe that's why Wyndham calls it a club 

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## CO skier (Feb 4, 2016)

raygo123 said:


> Yea, I said that once about the deeded property being transfered over, across trusts, for lack of another term, and was told it doesn't and can't ever happen.


How could Wyndham sell UDI Club Wyndham Access points if they did not have title to the underlying deeded points?

Here are the legal details about how CWA properties are held in a separate trust:

"A timeshare plan affiliated with the CLUB WYNDHAM Plus exchange program, CLUB WYNDHAM Access offer select units at multiple resort locations, which are deeded to First American Trust, a Federal Savings Bank. First American Trust is the trustee for the property owners association for CLUB WYNDHAM Access owners – PTVO Owners Association, Inc.  This association is the beneficiary of the trust and, as an Access owner, you are a member of the association."


Think of CWA as being an HOA within an HOA at each of the CWA resorts.





raygo123 said:


> One gets bigger the other smaller.  Maybe that's why Wyndham calls it a club


Club Wyndham Access would, of course, grow larger and individual UDI and fixed weeks grow smaller as deeds are foreclosed or donated to Ovation.  For HOAs wanting to have a reliable source of maintenance fees and not having to pay for the foreclosure process, it make a significant, positive difference.


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