[mar 2008 thread] Financial Problems

[richardd234]

My wife and I purchased a 2bedroom lock-off for annual use at Planet Hollywood Towers by Westgate in Las Vegas. It was purchased in September 07 and was financed through the developer. We live in the UK and are not familiar with the timeshare process or the US Real Estate Market. The problem is that we now have financial difficulties at home and can no longer afford the payments. I have tried to sell (like many others and have avoided the up-front fee companies like the plague!) but with no sucess as the resale figure, as can be expected, is much lower than originally paid (circa $7,000.00). Please can someone advise me on the legal issues if I default and make no further payments on my mortgage? Is it a simple case of default and they will reposes the TS and that is the end of the matter? Or is there other issues that I should still be aware of? Can they chase me in the UK for further monies? Will I end up in court? Will it affect my UK credit rating? I am happy (to a degree) to loose the funds already paid so long as I don't have to make any more payments and learn from my mistakes! PLEASE GIVE ANY ADVISE YOU CAN IT WILL BE MUCH APPRECIATED.

 

[richardd234]

It would also be great if anybody had any infomation on the ROFR prices that Wastegate are currently accepting to take the property back!

 

[Hoc]

If you default on the timeshare mortgage, they will be able to foreclose on the timeshare and then pursue you for the rest of the money owed. It will also affect your UK credit rating, and they will be able to take you to court for the balance, if they so choose.

 

[Garnet]

check ebay pricing???

I hate to refer you to my favorite low cost place to purchase...but if you need to sell quickly- try ebay. At least a good reference place for what you may be able to get.

 

[sjuhawk_jd]

Do you know this for fact!

If you default on the timeshare mortgage, they will be able to foreclose on the timeshare and then pursue you for the rest of the money owed. It will also affect your UK credit rating, and they will be able to take you to court for the balance, if they so choose.

Do you know this for fact that the timeshare company will pursue it all the way to UK? It is one thing what they are able to do and another if they actually do it. It would be good if people can speak from experience.

My guess is that the resort will foreclose the timeshare and then send threatening letters. Eventually, they will rather spend their resources to sell it to another "uninformed" person then to pursue the credit/court in another country.

 

[richardd234]

Thanks Garnet. I've already tried eBay and the auction ended on $6,400.00. This is short of my outstanding mortgage and with financial difficulties I obviously cannot afford to contribute the remaining balance. Thanks for your info though.

 

[richardd234]

Thanks sjuhawk jd

I'm not sure if they would pursue it to the UK. Finding someone who has experiance would be great. I have looked on here and redweek.com and I'm getting both mixed reports. Some say that they will pursue me others say that it will not affect my UK credit rating as the finance is in the US. All your help is appreciated though. Thanks

 

[richardd234]

If you default on the timeshare mortgage, they will be able to foreclose on the timeshare and then pursue you for the rest of the money owed. It will also affect your UK credit rating, and they will be able to take you to court for the balance, if they so choose.

How will they work out the 'rest of the money owed'? Will they sell it? Where? At what value?

 

[Lawlar]

Sad But True

Do you know this for fact that the timeshare company will pursue it all the way to UK? It is one thing what they are able to do and another if they actually do it. It would be good if people can speak from experience.

I believe HOC is correct. I use to do a lot of bankruptcy work and, in my early days, some collection work. (I'm a retired attorney).

The remedy for the lender (the loan may have been sold to another company) is to foreclose on the TS and then sue you for the balance owing on the note. You signed a promisory note which is an obligation that survives the loss of the TS to foreclosure.

My best guess is that a lawsuit will be filed against you in the U.S. and then the judgment will be sent to a collection attorney in your country. That collection attorney will get to keep a percentage from what is collected from you.

You can negotiate a settlement with the collection attorney. You might also try now to settle with the TS company (or whoever owns the note).

In the 90s, I helped a lot of people eliminate their TS and mortgage obligations through bankruptcy. Unfortunately, many people are having to resort to that remedy today. You should consult with a local attorney to determine what options are open to you. It is unlikely that the problem will simply go away.

 

[JeffW]

Thanks Garnet. I've already tried eBay and the auction ended on $6,400.00. This is short of my outstanding mortgage and with financial difficulties I obviously cannot afford to contribute the remaining balance. Thanks for your info though.

Is your outstanding balance $7000, or even with a $6400 offer, are you still $7k short (balance ~$13k)? If the first one, and you come up $600 short, that's pretty good in my opinion.

Otherwise, I don't think the news is good. Las Vegas is one of the harder hit areas in the US in terms of housing price drops, so even if Westgate would buy your week back (which I doubt it would), you'd likely receive pennys on the dollar. Timeshare companies have one goal - to get you to buy. They really don't care that much if you can afford it. So many other people are in a similar predicament, that's it's probably financially better for them to foreclose on units that owners can't pay for, and then resell them as new for the current price, than to offer you any more to take it off your hands.

Jeff

 

[richardd234]

Is your outstanding balance $7000, or even with a $6400 offer, are you still $7k short (balance ~$13k)? If the first one, and you come up $600 short, that's pretty good in my opinion.



Jeff

If I was only $7000 short of paying the balance then I would be happy to pay it. My remaining balance is much more than that.

Does anyone know if Westgate are enforcing the ROFR? and up to what cost?

 

[JeffW]

I didn't think so, but it was worth a shot

Jeff

 

[Hoc]

Do you know this for fact that the timeshare company will pursue it all the way to UK? It is one thing what they are able to do and another if they actually do it. It would be good if people can speak from experience.

I did not say that they would do it. Whether they would do so will depend on the company and how aggressive it is with collections. All I said is that they will be able to do it. Lawlar is probably right that, if they pursue it through the court system, they will do so in the U.S., then enter it as a foreign judgment in the U.K. The likelihood of them employing a U.K. collections agency is much higher, and they would have no problems putting a black mark on the OP's UK credit record.

 

[Phill12]

Thanks Garnet. I've already tried eBay and the auction ended on $6,400.00. This is short of my outstanding mortgage and with financial difficulties I obviously cannot afford to contribute the remaining balance. Thanks for your info though.

Richard when you posted these questions on Redweek you were given very good advice!

It was stated you bought Planet Hollwood Towers by Westgate in Las Vegas in 2007 for about $44,000 and paid about $5500 down and owe $38000 now!

If you want to walk away then your credit rating will take a hit and you lose your $5500.

We have known two families that have done this and it stayed in their credit report for years.

You might get lucky and find someone to take over your loan or you may hit the lottery,not sure which has best odds!:rofl: I'm not even sure if someone can take over your loan without going somewhere else for a new loan which won't happen most likey!

With all the people losing homes and jobs I'm not sure how bad this would be at this time. You need to decide if you keep it and make payments or tell them to take it back that you can not afford it and will make no more payments and let them do what ever they do!
Explain in a nice way what has happened and you can no longer pay for it and would like to deed it back to them. State no matter what happens you will need to stop paying and mean it. Tell them you thought this would be cheaper for them to take it back before they waste money going after you when nothing will change! You still can not pay for it!

I know one family that did this at the Ridge Tahoe years ago and when they understood she was serious they did a deed back to the Ridge and that was it.

Richard ,I have not used this company but have heard some good things about them! Paradise Timeshare Resales in Lake Tahoe sells and carries many top resorts in Hawaii and Las Vegas and other area's like Lake Tahoe. They state they charge no upfront fee's.

I would say to call and talk to them and see what they can do for you. I know they carry some Lake Tahoe Marriott's and there more than I would ever spend to buy a timeshare so there are some high price units.


Paradise Timeshare Resales #800-996-2001


No matter what you will lose money now and that is a fact but maybe this company can help you!

Good Luck! PHIL

 

[Hoc]

How will they work out the 'rest of the money owed'? Will they sell it? Where? At what value?

That will depend on the terms of your contract with them. My guess is that it allows them to add attorneys' fees and "reasonable costs of collection," which would be awarded by a court, as well as interest on the past due amount (usually around 10 percent a year until paid in full).

 

[richardd234]

Richard unless two of you are from UK and bought the same resort which isn't even open yet then you just asked these questions on Redweek and were given very good advice!

It was stated you bought for about $44,000 and paid about $5000 down and owe $38000 now!

If you want to walk away then your credit rating will take a hit and you lose your $5000.

We have known two families that have done this and it stayed in their credit report for years.

You might get lucky and find someone to take over your loan or you may hit the lottery,not sure which has best odds!:rofl: I'm not even sure if someone can take over your loan without going somewhere else for a new loan which won't happen most likey!

With all the people losing homes and jobs not sure how bad this would be at this time. You need to decide if you keep it and make payments or tell them to take it back that you can not afford it and will make no more payments and let them do what ever they do!

I know one family that did this at the Ridge Tahoe years ago and when they understood she was serious they did a deed back to the Ridge and that was it.


This is one of the main problems in timeshares that many people buy while on vacation without thinking. They come on these sites and blame everyone but themselves. Bottom line you agreed to buy a high price resort unit for way to much money and now you are stuck.

No matter what you will lose money now and that is a fact!

Good Luck! PHIL

Thanks Phil. I'm aware that I'm going to loose money. I'm just trying to minimise the damage! We are aware that we are a fault and don't wish to blame anyone else but ourselves. When were purchased we were in a very good financial position and made use of a weak dollar rate. Althought rate hasn't affected us our financial position has changed greatly.

 

[DaveS]

Here is another point of view...

My wife and I purchased a 2bedroom lock-off for annual use at Planet Hollywood Towers by Westgate in Las Vegas. It was purchased in September 07 and was financed through the developer. We live in the UK and are not familiar with the timeshare process or the US Real Estate Market. The problem is that we now have financial difficulties at home and can no longer afford the payments. I have tried to sell (like many others and have avoided the up-front fee companies like the plague!) but with no sucess as the resale figure, as can be expected, is much lower than originally paid (circa $7,000.00). Please can someone advise me on the legal issues if I default and make no further payments on my mortgage? Is it a simple case of default and they will reposes the TS and that is the end of the matter? Or is there other issues that I should still be aware of? Can they chase me in the UK for further monies? Will I end up in court? Will it affect my UK credit rating? I am happy (to a degree) to loose the funds already paid so long as I don't have to make any more payments and learn from my mistakes! PLEASE GIVE ANY ADVISE YOU CAN IT WILL BE MUCH APPRECIATED.

Hello Richard,

I see others have given you various suggestions/opinions. I would like to give you my 2 cents worth. I agree that if you stop paying your mortgage, the lender (bank) will eventually foreclose on your TS. In theory they will need to sell it to determine how much they can recoop and then you will owe the difference. It is unlikely they can sell it for much, as it will be sold at auction, which will probably draw very low offers.

Now will they actually come after you in the UK, in my opinion, probably not. We are not talking about alot of money here, relatively speaking. It will cost them quite a bit to chase after you in the UK for whatever the difference was after the auction. So I don't believe they will do it, JMHO.

My suggestion is for you to contact the lender (not the TS developer who sold you the week) and request to speak with their 'loss mitigation' department. Tell them your financial situation and request that they accept the note back along with the deed. You need to make a case with them. The goal is for them to take the deed, forgive the remaining balance of the loan. If they agree, then you MAY get a black mark on your credit history. You definitely will if you were in the US, but being in the UK, I don't know.

Sorry to hear about your financial situation. Hopefully everything will work out.

Dave Sun

 

[Steamboat Bill]

My suggestion is for you to contact the lender (not the TS developer who sold you the week) and request to speak with their 'loss mitigation' department. Tell them your financial situation and request that they accept the note back along with the deed. You need to make a case with them. The goal is for them to take the deed, forgive the remaining balance of the loan. If they agree, then you MAY get a black mark on your credit history. You definitely will if you were in the US, but being in the UK, I don't know.

I also agree with this advice.

Call Westgate ASAP and tell them about your situation and ask them to keep your deposit and all money you have paid so far in exchange for releasing you from fulfilling your contract. Be very nice on the phone and get it in writing. If they refuse....then I would probably simply stop paying on the note as it seems you may have other larger problems to worry about than a US-based timeshare company.

 

[JudyS]

... It was stated you bought for about $44,000 and paid about $5500 down and owe $38000 now!

If you want to walk away then your credit rating will take a hit and you lose your $5500.

We have known two families that have done this and it stayed in their credit report for years. ...

Well, if there is really $38000 owed, I think it's unlikely that the damage to your credit rating, Richard, will end up costing you anything like that much money, even if credit reports matter as much in the UK as they do in the US, which they probably don't. (In the US, credit reports are used for hiring, insurance rates -- you name it.)

On a thread posted a while back in the TUG Lounge, I talked about some problems I was having with medical collection accounts. I have a medical collection on my credit report from when we had a dispute with our health insurer, and my husband not only a couple of collections from that health insurance dispute, but also a collection account that recently mysteriously appeared on his credit report. (This "mystery" collection account is for a medical service I thought we had paid for years ago. Despite repeated calls to the collection agency, we can't figure out why they say we owe them money; we never received a bill for this.)

The thing is, our credit is still good despite having a few collections on our records. The collection accounts seem to matter much less than the fact that we pay all our general bills (mortgage, credit cards) on time.

Now, a foreclosure would hurt your credit report more than a simple collection account would, but if you are willing to deed the timeshare back to the resort, that won't hurt your rating as much as an actual foreclosure would. If you end up doing a "deed in lieu of foreclosure" that will hurt your chances for getting a mortgage for a few years, but if the UK credit rating system is anything like that in the US, the impact will be greatly lessened within a year or two, even if the derogatory information stays on your credit report for many years.

By the way, I recently came across a statement by a loan officer saying that he has seen many credit reports with unpaid timeshares on them, and that he thinks few people ever pay off their timeshare loans. He said he penalizes people with timeshare collections on their accounts, but only because he thinks it shows the person is gullible and may get swindled in the future, not because he thinks it reflects on their general willingness or ability to pay their debts. He also said he thinks most loan officers ignore timeshare collections.

 

[wbtimesharer]

Do you know this for fact that the timeshare company will pursue it all the way to UK? It is one thing what they are able to do and another if they actually do it. It would be good if people can speak from experience.

My guess is that the resort will foreclose the timeshare and then send threatening letters. Eventually, they will rather spend their resources to sell it to another "uninformed" person then to pursue the credit/court in another country.

If you only owe 7000 and the auction ended at 6400, that only leaves you $600 to pay which is considerably better than 7000. Then again, you might get lucky and sell it for more than you owe.

Bill

 

[richardd234]

Just a quick note to say thatnks to everyone here on your advise. It's greatly appreciated. Site's like this a invaluable and I only wish that I had walked away and looked at this site before purchasing. That way if I still wanted to purchase I could have purchased resale from someone like me. Therefore getting what I wanted and helping some else too. America is a great land with wonderful people. My wife and I love it and its becasue of friendly people like you guys. Thats the main resaon that we only vacation there.

Thanks again. Keep your opinion and information coming and I'll keep you all updated. Hopefully my mistakes will prevent others from going down the same road.

 

[richardd234]

If you only owe 7000 and the auction ended at 6400, that only leaves you $600 to pay which is considerably better than 7000. Then again, you might get lucky and sell it for more than you owe.

Bill

No. The auction ended on $6400. If I had to contribute the same again to get rid of it I would. I owe >$30,000. Any takers.... HaHaHa

 

[PerryM]

Need to work it out...

First, I don’t recommend foreclosure – your credit rating will take a terrible hit; this is truly a global economy. Try to work something out with the lender, which is probably a subsidiary of Westgate.

Trying to sell the ph on the resale market is going to be very difficult at this moment – it will not be ready until August of 2009. Hard to sell something that can’t be used for another 1.5 years and then making reservations for up to a year for a total of 2.5 years. Who wants to buy this? Someone who was actually at ph and purchased is probably the only answer.

Sadly I see no easy solution to this but working out a solution with Westgate.

I don't know how bankruptcy works over there but millions do it every year here and immediately get new credit cards afterwards. If you need a loan or want to refinance an existing loan I'd do it quickly. Same thing with new credit cards.

Good luck,

 

[Talent312]

Just a quick note to say thatnks to everyone here on your advise. It's greatly appreciated. Site's like this a invaluable and I only wish that I had walked away and looked at this site before purchasing. That way if I still wanted to purchase I could have purchased resale from someone like me. Therefore getting what I wanted and helping some else too. America is a great land with wonderful people. My wife and I love it and its becasue of friendly people like you guys. Thats the main resaon that we only vacation there.

Thanks again. Keep your opinion and information coming and I'll keep you all updated. Hopefully my mistakes will prevent others from going down the same road.

If they foreclose, they'll first get a judgment which includes the balance of the debt, attorney fees, court costs, interest on the judgment and direction for the forced-sale (auction) of the property at the courthouse. At the auction, typically, the only bidder is the mortgage holder who wins it for $1, leaving you at risk for the balance.

To enforce your personal liability in UK courts, they'd likely have to employ solicitors in the UK to confirm the judgment, which they may not bother to do... but I would count on them hiring a collection agency to harass you and leaving a black mark on your credit.

My 2 cents:
First, try to get them to accept a "deed in lieu of foreclosure" to wipe out the debt. When they refuse to accept that, sigh and tell them that you'll have no choice but to default, wait for them to foreclose, and then file bankruptcy to prevent them from collecting a dime... Ask them if they really want to spend the attorney fees, court costs, and end up with nothing other than the unit, anyway.

 

[JMAESD84]

If they foreclose, they'll first get a judgment which includes the balance of the debt, attorney fees, court costs, interest on the judgment and direction for the forced-sale (auction) of the property at the courthouse. At the auction, typically, the only bidder is the mortgage holder who wins it for $1, leaving you at risk for the balance.

I don't want to sidetrack this thread, but I'd definitely bid at least $2 for this timeshare.

Anybody with knowledge about these bargain courthouse auctions want to start a new thread. This might be better than eBay.