[2008] Southcape Resort

[Sou13]

Mortgage fraud?

I'm wondering whether the deal to take out a $2.5 mortgage on illegally combined resorts could qualify as mortgage fraud.

 

[e.bram]

No. Because in a default the complexes are worth many times the mortgage amount ($200,000.00 per unit)as whole ownership. The only fraud is againt the TS owners, for putting the TS in a precarious financil condition.

 

[timeos2]

No. Because in a default the complexes are worth many times the mortgage amount ($200,000.00 per unit)as whole ownership. The only fraud is againt the TS owners, for putting the TS in a precarious financil condition.

It sounds like they may be attempting to pledge the TIMESHARE development(s) as collateral for a mortgage loan9s). That would be fraudulent as no company or Board has that right. They don't own it so they can't pledge it. And it also appears they are combining two unrelated resorts, another no-no. The owners are the individual weeks buyers and their property, 1/52 of something, cannot be used for mortgage loans. I'm surprised you missed that.

 

[e.bram]

NEVM owners many units according to the posts here. They pledged those I assume and pay the mortgage from management fees. It is a fraud against the TS owners, not the bank. If they cause the TS to go belly up the bank will get their money and the rest will go to the developer. Also along with ownership of the TS units goes a fraction of the common ares. The developer also has title to from 30% TO 60% of the whole complex. good collateral for the bank.

 

[timeos2]

Can't be done legally

NEVM owners many units according to the posts here. They pledged those I assume and pay the mortgage from management fees. It is a fraud against the TS owners, not the bank. If they cause the TS to go belly up the bank will get their money and the rest will go to the developer. Also along with ownership of the TS units goes a fraction of the common ares. The developer also has title to from 30% TO 60% of the whole complex. good collateral for the bank.

You cannot mortgage XX% of a property. It's 100% or nothing. Thus you need 100% owner approval which they do not have. It is fraud in multiple ways. The definition:

Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Fraud may also be made by an omission or purposeful failure to state material facts, which nondisclosure makes other statements misleading.

Misrepresenting ones ability to enter into a mortgage would qualify.

 

[e.bram]

Timeos2:
If you bought a unit in Southcape with a mortgage you would need 100% of the owners to agree? You are saying nobody could buy a TS there using a mortgage.
I don't think so.

 

[timeos2]

Timeos2:
If you bought a unit in Southcape with a mortgage you would need 100% of the owners to agree? You are saying nobody could buy a TS there using a mortgage.
I don't think so.

That is correct. Timeshare loans are usually personal loans, not mortgages. But if someone COULD get a mortgage on a timeshare that would be legal as they control 100% of that deed for 1 week or x points of use. They cannot commit the value of common areas, furnishings, buildings, etc - that belongs to the Association which no one entity has a right to commit to a lien/mortgage. On the outside chance that the developer was only committing his week(s) of ownership then he could get a mortgage based on that BUT then they couldn't sell the use rights without disclosing the fact that there is an outstanding lien on them. Instant no sale. Still sounds like they are not within the law.

 

[Classylassy523]

Does the mortgage company expect units to be sold?

NEVM owners many units according to the posts here. They pledged those I assume and pay the mortgage from management fees. It is a fraud against the TS owners, not the bank. If they cause the TS to go belly up the bank will get their money and the rest will go to the developer. Also along with ownership of the TS units goes a fraction of the common ares. The developer also has title to from 30% TO 60% of the whole complex. good collateral for the bank.

This is probably a dumb question ... does the mortgage company expect NEVS to sell units? If that is so, and NEVS entered into the mortgage agreement knowing that units would not be sold but the main push would be to sell Festiva points, would that also constitute fraud on their part?

If so, then the list keeps growing.

Another question ... just what does NEVS own? Some people are of the opinion that NEVS owns the resorts. I was under the impression that all that was purchased from Barth & Woods were the unsold units and the so-called 'developer rights'. How can a few unsold weeks (mainly in the weeks the resort aren't even open) and whatever percentage of the common areas those unsold weeks represent be worth $2.5 million? And, if NEVS is dependent on the management fees charged by NEVMS to pay the mortgage payments, would the mortgage company require some kind of proof or guarantee that NEVMS/NEVS would be retained and continue to run these resorts? If so, what kind of guarantee could NEVS have provided to Colebrook Financial? Or, does NEVS have someone or something in the background guaranteeing that mortgage? Something like Festiva Resorts?

 

[e.bram]

Timeos2:
All of my TS deeds show a % of the common area which I own.
All the bank cares is that they are getting their payments and have sufficient collateral to back up the principal. NEVS pays the bank with it's management fees. The fraud is against the TS owners, not the bank.

 

[Sou13]

If I'm understanding this, NEVS took out a $2.5 million mortgage on two resorts, and as weeks are being discharged they are being turned over to Festiva via Intercity Escrow Services. NEVS gets 50% of every $2990 that weeks owners pay Outfield Marketing to "convert" to the FAC. NEVMS gets paid by the owners' associations for "managing" the management of the resorts. The entity responsible for paying off the mortgage is NEVS, not NEVMS.

 

[Sou13]

By now more than 700 weeks have been converted to Festiva points. If NEVS collected nearly $1500 for each conversion, that's $1500 x 700 = $1,050,000 that NEVS has taken in to pay off the mortgage. NEVS isn't halfway there!

 

[judyjht]

Here is the link to an article that was in the Boston Globe this morning - very interesting!

http://tinyurl.com/ye24fdp

 

[Sou13]

Thanks for the link, judyjht!

Thanks for the link, judyjht! I don't have time to comment today but the reader comments seem to be directed more at the Mitchells' sweaters than they are at the situation!

 

[Sou13]

Thank you, bill798!

Now that I've had a little more time to read the article and reader comments, I don't know whether to cheer or to scream. Had Jenifer McKim bothered to interview Southcape owners she might have been able to present a better picture of the NEVS/Outfield Marketing/Festiva mess.

bill798 wrote:
Actually, it is illegal for Outfield Marketing to lie to owners that an imminent $8000 maintenance fee is coming, but you can avoid it if you quitclaim your deed and signup to ou club for only $4800 ($676 credit card now so we can get sales commissions) and the rest on a 14% loan. Outfield's general partner is METCO LLC, whose managers are Steve Lamantia, Mark Monroe, and Thomas Franks, who are also the new trustees of Sandcastle Condominium Trust, but this was never disclosed.
See fraudulent concealment and fraudulent misrepresentation in the Massachusetts criminal code.

Thank you, bill798!

 

[TUGBrian]

article certainly makes it look like the new owners came in and are simply charging people to make necessary repairs.

interesting

 

[ChrisH]

Simply NOT true

Now that I've had a little more time to read the article and reader comments, I don't know whether to cheer or to scream. Had Jenifer McKim bothered to interview Southcape owners she might have been able to present a better picture of the NEVS/Outfield Marketing/Festiva mess.

Actually, she did interview at least one Southcape owner by phone prior to publishing this article, but evidently went with her original information from a Sandcastle owner and from then interviewing 10 or so more other Sandcastle owners.

Chris H

 

[Carolinian]

That is correct. Timeshare loans are usually personal loans, not mortgages. But if someone COULD get a mortgage on a timeshare that would be legal as they control 100% of that deed for 1 week or x points of use. They cannot commit the value of common areas, furnishings, buildings, etc - that belongs to the Association which no one entity has a right to commit to a lien/mortgage. On the outside chance that the developer was only committing his week(s) of ownership then he could get a mortgage based on that BUT then they couldn't sell the use rights without disclosing the fact that there is an outstanding lien on them. Instant no sale. Still sounds like they are not within the law.

There is nothing legally to stop a lender from accepting an undivided interest in real property as collateral for a loan. Most do not simply for practical reasons, in that in can present a big mess if you have to foreclosure and then sell an undivided interest. There tends to be much less of a market for undivided interests.

 

[Carolinian]

You need to get as many victims of this scam to complain to the local prosecutor as possible.

Now that I've had a little more time to read the article and reader comments, I don't know whether to cheer or to scream. Had Jenifer McKim bothered to interview Southcape owners she might have been able to present a better picture of the NEVS/Outfield Marketing/Festiva mess.

bill798 wrote:
Actually, it is illegal for Outfield Marketing to lie to owners that an imminent $8000 maintenance fee is coming, but you can avoid it if you quitclaim your deed and signup to ou club for only $4800 ($676 credit card now so we can get sales commissions) and the rest on a 14% loan. Outfield's general partner is METCO LLC, whose managers are Steve Lamantia, Mark Monroe, and Thomas Franks, who are also the new trustees of Sandcastle Condominium Trust, but this was never disclosed.
See fraudulent concealment and fraudulent misrepresentation in the Massachusetts criminal code.

Thank you, bill798!

 

[Carolinian]

It's not piracy, Carolinian, it's just ignorance of the facts and a perfect example of how far out the wild speculations, rumors and half truths can get. If it weren't for the fact that some owners might actually believe some of the stuff that's posted on here it would be laughable.

NEVS owns ALL of the weeks in units 32 and 33!! No weeks were ever sold in either of the units. That's the fact.

If they were dedicated to timesharing, then they are NOT ''wholly owned''. You may own 51 timeshare weeks or 50, depending on how many maintenance weeks the resort has, in those units, and you are required to pay m/f's on each and every one of them. Do you?

 

[Sou13]

Another clue forthcoming

A Southcape owner who has saved all her meeting minutes read the 1989 report to me over the telephone. She said she would copy them and mail them to me.

What's most interesting about this particular report is that it may shed some light on how Southcape got into a legal hassle as a result of a decision that was rendered in Provincetown. It looks to me as though our troubles may have begun when Fred Sateriale got us mixed up with Sandcastle in 1987.

The photo gallery of the renovations going on at Sandcastle is at http://www.sandcastlecapecod.com/PhotoGalleryDetails.asp?cid=2&pg=1002

When did those "renovations" start? Was it after the Sandcastle owners began paying the (illegally imposed) special assessment?

 

[Sou13]

Contact me for Southcape documents

The Southcape owner who sent me some meeting minutes that I seem to be missing has also included some other missing documents which I will scan and send to Southcape owners on my email list ASAP. Unfortunately this won't be until after Jan. 22 when the computer lab reopens for the next session.

If you are not on my elist, please register to post on TUG so that you can email me to be included on my Southcape owners elist.

 

[Sou13]

A Southcape owner who has saved all her meeting minutes read the 1989 report to me over the telephone. She said she would copy them and mail them to me.

What's most interesting about this particular report is that it may shed some light on how Southcape got into a legal hassle as a result of a decision that was rendered in Provincetown. It looks to me as though our troubles may have begun when Fred Sateriale got us mixed up with Sandcastle in 1987.

The photo gallery of the renovations going on at Sandcastle is at http://www.sandcastlecapecod.com/PhotoGalleryDetails.asp?cid=2&pg=1002

When did those "renovations" start? Was it after the Sandcastle owners began paying the (illegally imposed) special assessment?

I'm trying to find out what that tax dispute was all about and whether there are any other timeshare resorts in Provincetown.

 

[Sou13]

Coakley's demise

Now that AG Martha Coakley has lost the Senate seat to Republican Scott Brown, is there any hope for a review of our plight?

 

[Sou13]

New ID for NEVMSLLC

It appears that NEVMSLLC had taken on another username on TUG. Check out this discussion:

Brewster Green and IVS Realty

 

[Sou13]

More NEVMSLLC troubles

Isn't anyone objecting to not being able to split weeks anymore?

My last opportunity to reserve a split week came in May 2009, before we were notified that "effective immediately" no more split weeks reservations could be made in October.

Meanwhile, NEVMSLLC stated in a published response to Timesharing Today that "The resorts have not been taken away from anyone. Owners still have the same rights they’ve always had."

So now another of the rights we've always had has been taken away.

That's not all. I had a call from Southcape about the unit I've reserved for week 7. The entire building is being renovated, and the unit I reserved won't be completed by week 7.

This is exactly what I've been trying to get deeded owners to notice. If you reserve a unit during a certain week, that unit is supposed to be available because you own that week!

Renovating 18 units at once when they've always been renovated "on a piecemeal basis" means that units will not be available, and to be renovating units during the week of school vacation is a violation of the Master Deed IMVHO.

Last year the pool was being repainted and deeded owners didn't have use of the pool in March. This year, units are being renovated and deeded owners don't have the use of those units.

Hello, is anyone reading these posts?