Considering Foreclosing at very Beginning of Contract (Wyndham Vacation Ownership)

[RedR1]

After much thinking, crunching numbers, and kicking myself for getting into this thing in the first place, I have pretty much decided that this membership isn't my thing. It's just not financially worth it and I can't justify it with our lifestyle right now. Sure, i can afford it, but in my opinion, my money will be better spent doing other things. I have a pretty substantial loan with Wyndham for a membership and bonus points etc, and I haven't used ANYTHING yet. My first payment on the loan is coming up in about a week. And yes, I missed the rescission window. D'oh.

Anyways, I'm ok with foreclosing it (notifying them that I intend to foreclose) and taking the credit hit. I'm just wondering if there's anything else I should be worried about (getting sued?) by going down this path.

Also, I did see the thread about the foreclosure/credit tracking here. I'll be happy to post my findings there to add to the data.

Any advice welcome. Thanks!

 

[LannyPC]

I have a pretty substantial loan with Wyndham for a membership and bonus points etc, and I haven't used ANYTHING yet. My first payment on the loan is coming up in about a week. And yes, I missed the rescission window. D'oh.

Anyways, I'm ok with foreclosing it (notifying them that I intend to foreclose) and taking the credit hit. I'm just wondering if there's anything else I should be worried about (getting sued?) by going down this path.

So do you own a membership or deeded property?

 

[RedR1]

So do you own a membership or deeded property?

A membership. Specifically, it's the ClubWyndham Access Vacation Ownership Plan

 

[Passepartout]

After much thinking, crunching numbers, and kicking myself for getting into this thing in the first place, I have pretty much decided that this membership isn't my thing. It's just not financially worth it and I can't justify it with our lifestyle right now. Sure, i can afford it, but in my opinion, my money will be better spent doing other things. I have a pretty substantial loan with Wyndham for a membership and bonus points etc, and I haven't used ANYTHING yet. My first payment on the loan is coming up in about a week. And yes, I missed the rescission window. D'oh.

Anyways, I'm ok with foreclosing it (notifying them that I intend to foreclose) and taking the credit hit. I'm just wondering if there's anything else I should be worried about (getting sued?) by going down this path.

Also, I did see the thread about the foreclosure/credit tracking here. I'll be happy to post my findings there to add to the data.

Any advice welcome. Thanks!

It's your money. Spend it as you wish, but you saw value when you went to the presentation. You can always just stop paying, take the credit hit, and the blemish on your credit, but why not at least give it a try. Use the bejesus out of the bonuses they gave you. Learn the system. You may just find out that TS isn't all that bad a hobby, planning luxurious vacations.

You're not alone. A poll taken among TUGgers showed that just about half got into it exactly as you did. We went to a presentation, were taken in by the flowery talk of a timeshare salesweasel and were having so much fun on the vacation that we didn't read the contract until it was too late to rescind. By then we were too committed to take the credit hit and just kept it up. Most of us 'dollar cost averaged' it by buying more vacation time on the resale market to bring the overall price down.

Stick around. You'll find us- as the name of the group implies, Timeshare USERS. We don't relish needing to help folks reduce the damage they do to themselves trying to undo what they, as adults, have done.

Jim

 

[dioxide45]

You do have the possibility of them sending a 1099-C. I know DRI has done this in the past. Not sure how easy it is to contest it with the IRS since with most timeshare loans, there is no bank actually funding loan at closing. They are essentially seller financing, buy here pay here kinda deals.

Edited to add: I beleive a 1099-C only applies if they have recourse on the debt. This may or may not apply depending on the state the timeshare is located.

Timeshare cancellation of debt

I cancelled a Disney time share and received a 1099-c "Cancellation of Debt" for 2019. The amount of debt "discharged" is approximately $15k. I did not receive any money/income from Disney as a part of the discharge. Do I have to pay income tax on the $15k that Disney has "cancelled" even...

ttlc.intuit.com

Topic No. 431 Canceled Debt – Is It Taxable or Not? | Internal Revenue Service

Topic No. 431 Canceled Debt – Is It Taxable or Not?

www.irs.gov

 

[ScoopKona]

I have a "in the middle" suggestion.

1) You can very likely buy a resale that functionally does whatever you own now. And you can get this somewhere between "free" and "cheap."

2) In the meantime, you have a shiny new timeshare with no maintenance fees due until the end of the year. And summer is coming.

Before you walk away and take the credit hit -- wring as much vacation time as you possibly can from what you have. Try to book something before your first payment is due, just as soon as you can break away and take a vacation. At the very least, see what's out there. Many of "the regulars" are very happy with their timeshare.

You may discover that making a few payments is far less expensive than renting a week or two, Book as much as you can as soon as you can. Use as much as you can. Treat it like a credit card that you can charge to the limit with no intention of every paying. Then you can walk away. And at least you got something for your trouble.

In the future, no timeshare presentation is worth it. None of them. You'd have to value your time at almost $0/hr to want to sit through that.

 

[RedR1]

It's your money. Spend it as you wish, but you saw value when you went to the presentation. You can always just stop paying, take the credit hit, and the blemish on your credit, but why not at least give it a try. Use the bejesus out of the bonuses they gave you. Learn the system. You may just find out that TS isn't all that bad a hobby, planning luxurious vacations.

You're not alone. A poll taken among TUGgers showed that just about half got into it exactly as you did. We went to a presentation, were taken in by the flowery talk of a timeshare salesweasel and were having so much fun on the vacation that we didn't read the contract until it was too late to rescind. By then we were too committed to take the credit hit and just kept it up. Most of us 'dollar cost averaged' it by buying more vacation tome on the resale market to bring the overall price down.

Stick around. You'll find us- as the name of the group implies, Timeshare USERS. We don't relish needing to help folks reduce the damage they do to themselves trying to undo what they, as adults, have done.

Jim

I really appreciate that. I did think there was value during the presentation, but of course they really don't give you a good opportunity to do any in-depth thinking to realize that it's not all it's cracked up to be (for us anyways).

I feel like i did give it a decent go - we did the orientation / online seminars, got on the website and looked into booking vacations, etc. However, after a lot of thought, here's the general deal. Obviously this doesn't consider any sort of offsetting of the costs by buying points from other users on the market:

We bought into the program for about $24k. I can probably pay off the loan totally with about $35k (need to find a much better loan obviously). Additionally, the maintenance fee is $140 a month and I'm sure it's only going to grow as time goes on.

If I look at 10 year timespan, I will have paid a little more than $44k into the program (assuming the maintenance fees don't increase). That's an average of $4,400 per year.

Our longest vacations are usually just over 2 weeks long, so if we consider that as the basis, $4,400 / 14 nights = $314 per night that could have been spent on a VERY nice hotel. Heck, even at a 20 day vacation, it's still not making much sense ($4,400 / 20 = $220 per night).

Particular things that affect this:

- We don't really take vacations with friends and family (just my spouse and I). And don't really spend that much time in the hotel/resort (unless it's an all-inclusive)
- We like to travel to Nashville on weekends, and we thought that we could stay at the new Margaritaville hotel (part of the Wyndham program), but it's booked up for MONTHS.
- We have a "Silver VIP" membership which gets us a 25% discount on hotel points, but that's only applicable if you book the hotel within a 2 months prior to checkin. WTF is that???
- Many of the places we considered staying are just "too many points" to justify going to (will only give us 10 or so days there with the 200k points we have per year)


I would be very happy to hear some good reasons why we should stay with this? Obviously it starts to look a lot better the longer the timespan you study, but how much will maintenance fees be by then? I just feel like I could do better by spending that money on better vacations since for us, it's not all about the place we are sleeping at.

Thanks!

 

[RedR1]

I have a "in the middle" suggestion.

1) You can very likely buy a resale that functionally does whatever you own now. And you can get this somewhere between "free" and "cheap."

2) In the meantime, you have a shiny new timeshare with no maintenance fees due until the end of the year. And summer is coming.

Before you walk away and take the credit hit -- wring as much vacation time as you possibly can from what you have. Try to book something before your first payment is due, just as soon as you can break away and take a vacation. At the very least, see what's out there. Many of "the regulars" are very happy with their timeshare.

You may discover that making a few payments is far less expensive than renting a week or two, Book as much as you can as soon as you can. Use as much as you can. Treat it like a credit card that you can charge to the limit with no intention of every paying. Then you can walk away. And at least you got something for your trouble.

In the future, no timeshare presentation is worth it. None of them. You'd have to value your time at almost $0/hr to want to sit through that.

At this point, I just want out - and don't want to give Wyndham any reason to come after me for recouping their "lost" money. Maybe I'm worrying too much about it.

 

[ScoopKona]

At this point, I just want out - and don't want to give Wyndham any reason to come after me for recouping their "lost" money. Maybe I'm worrying too much about it.

From the sounds of your reply to Jim, the entire system is probably a bad fit for you. There are other name-brands which are basically tailor-made for couples who aren't tied to school vacations.

I'd still get as much time as I could -- you probably paid a down payment which you will never get back. Once they foreclose, they aren't going to come after you for using the system. (They'll ding your credit and keep what you've paid in. And that's really all they can do. At the very least, you get to see if ANYTHING works like they said.

Just pulling numbers from thin air, if you have $2500 sunk, a week at $360 per night stings far less than nothing at all for your time and money. Depending on how the program works, you could possibly get more than that. And then leave at least having a vacation or two.

 

[RedR1]

From the sounds of your reply to Jim, the entire system is probably a bad fit for you. There are other name-brands which are basically tailor-made for couples who aren't tied to school vacations.

I'd still get as much time as I could -- you probably paid a down payment which you will never get back. Once they foreclose, they aren't going to come after you for using the system. (They'll ding your credit and keep what you've paid in. And that's really all they can do. At the very least, you get to see if ANYTHING works like they said.

Just pulling numbers from thin air, if you have $2500 sunk, a week at $360 per night stings far less than nothing at all for your time and money. Depending on how the program works, you could possibly get more than that. And then leave at least having a vacation or two.

We are literally $0 out of pocket at this point in time. Ok, i think there might have been some initial fees, but we got a loan for the down payment as well (it was one of those "6 months same as cash" deals). If we make the first payments on both loans, we'll be out about $500 or so i think.

Might have to think about your idea about using what we can, but it just feels wrong. Then again, shouldn't Wyndham also feel wrong about their shitty sales tactics?

 

[dioxide45]

We are literally $0 out of pocket at this point in time. Ok, i think there might have been some initial fees, but we got a loan for the down payment as well (it was one of those "6 months same as cash" deals). If we make the first payments on both loans, we'll be out about $500 or so i think.

Might have to think about your idea about using what we can, but it just feels wrong. Then again, shouldn't Wyndham also feel wrong about their shitty sales tactics?

That loan for the down payment may have been on a credit card that they signed you up for during the presentation.

 

[BoomerKwanger]

I would be very happy to hear some good reasons why we should stay with this? Obviously it starts to look a lot better the longer the timespan you study, but how much will maintenance fees be by then? I just feel like I could do better by spending that money on better vacations since for us, it's not all about the place we are sleeping at.

Personally speaking, I got into timeshares for 2 reasons:

1) Having a kid. BEFORE having a kid, my wife and I were perfectly happy with booking spur of the moment hotel rooms or just renting some guy's random room on AirBnB. With an additional person, that equation changes entirely. I stayed at a timeshare last year with a baby (a 1BR unit at a Margaritaville in St. Thomas), and compared to the above options, it was like night and day. Having a wall separating the baby is a big plus, but also having a full kitchen with a fridge is a huge help as well. The kitchen also helps you save some money during the vacation since you won't have to eat out as much. I really can't imagine going back to hotel rooms at this point...and as for AirBnBs, booking private rooms in a stranger's house with a baby just won't work. We could book a full apartment (like 1br/2br/etc) but timeshare would be cheaper in a lot of cases, after factoring in taxes/cleaning fees/AirBnB fees.

2) To some extent, I did wanted to be forced to take vacations. I tend to be frugal, and unless I have enough motivation, I tend to just take smaller trips nearby rather than weeklong vacations to new places. Having something that you're forced to use each year can actually be great.

Those things being said, I will also admit that I'm a resale buyer, so the math from my point of view is completely different. I'm kind of with @ScoopKona on this...you already have it, why not try it out for a bit? If you're already thinking foreclosure, the only thing you risk is learning more about the thing you just bought.

As for trying to squeeze out as much value as possible from this purchase, this forum as great tips, so I would recommend reading up if you decide you want to start trying to use it. A few initial tips that might be helpful are:
- A lot of VIP owners will book a place in advance to make sure they get a reservation, then within 60 days, check to see if the SAME unit type they booked is available for the same dates. They then make a 2nd reservation with the discount, then cancel the initial one (which anyone can do and get all their points back as long as it's done 15 days within check-in)
- Booking off-season, or from Monday-Thursday will save a bunch of points and let you get more vacation days out of things. Also it increases the chances that you can get a free upgrade with your VIP status
- Keep checking https://clubwyndham.wyndhamdestinations.com/us/en/deals-and-offers/owner-travel-deals from time to time, since they offer discounts on random resorts.
- If a place you want is booked, just keep checking (like once per day or more) since turnover is very high and people cancel bookings all the time.

 

[RedR1]

That loan for the down payment may have been on a credit card that they signed you up for during the presentation.

 

[RedR1]

It's definitely a 0% for x months loan, but yes, i do believe it is set up to be paid via CC.

 

[dioxide45]

It's definitely a 0% for x months loan, but yes, i do believe it is set up to be paid via CC.

THen that is different than what I am referring to. Often for the down payment, Wyndham will have people apply for an RCI credit card from Barclays.

 

[RedR1]

Personally speaking, I got into timeshares for 2 reasons:

1) Having a kid. BEFORE having a kid, my wife and I were perfectly happy with booking spur of the moment hotel rooms or just renting some guy's random room on AirBnB. With an additional person, that equation changes entirely. I stayed at a timeshare last year with a baby (a 1BR unit at a Margaritaville in St. Thomas), and compared to the above options, it was like night and day. Having a wall separating the baby is a big plus, but also having a full kitchen with a fridge is a huge help as well. The kitchen also helps you save some money during the vacation since you won't have to eat out as much. I really can't imagine going back to hotel rooms at this point...and as for AirBnBs, booking private rooms in a stranger's house with a baby just won't work. We could book a full apartment (like 1br/2br/etc) but timeshare would be cheaper in a lot of cases, after factoring in taxes/cleaning fees/AirBnB fees.

2) To some extent, I did wanted to be forced to take vacations. I tend to be frugal, and unless I have enough motivation, I tend to just take smaller trips nearby rather than weeklong vacations to new places. Having something that you're forced to use each year can actually be great.

Those things being said, I will also admit that I'm a resale buyer, so the math from my point of view is completely different. I'm kind of with @ScoopKona on this...you already have it, why not try it out for a bit? If you're already thinking foreclosure, the only thing you risk is learning more about the thing you just bought.

As for trying to squeeze out as much value as possible from this purchase, this forum as great tips, so I would recommend reading up if you decide you want to start trying to use it. A few initial tips that might be helpful are:
- A lot of VIP owners will book a place in advance to make sure they get a reservation, then within 60 days, check to see if the SAME unit type they booked is available for the same dates. They then make a 2nd reservation with the discount, then cancel the initial one (which anyone can do and get all their points back as long as it's done 15 days within check-in)
- Booking off-season, or from Monday-Thursday will save a bunch of points and let you get more vacation days out of things. Also it increases the chances that you can get a free upgrade with your VIP status
- Keep checking https://clubwyndham.wyndhamdestinations.com/us/en/deals-and-offers/owner-travel-deals from time to time, since they offer discounts on random resorts.
- If a place you want is booked, just keep checking (like once per day or more) since turnover is very high and people cancel bookings all the time.

Very good suggestions and I'll be considering it for sure.

What's bothersome to me is that if we decide to go "all-in" on this, we're locking into their system for ALL our vacations from now on, and we're already mildly frustrated with it. Just not giving us a warm fuzzy getting, you know? I feel like we're going to be paying a LOT more for admittedly much nicer accommodations, but at the expense of having to deal with limiting ourselves to off-season, lack of available properties, etc. Nicer rooms are great, but i feel like getting a $200 hotel room is plenty nice and gives us a lot more freedom and flexibility.

 

[RedR1]

THen that is different than what I am referring to. Often for the down payment, Wyndham will have people apply for an RCI credit card from Barclays.

Oh, no. We didn't sign up for a new CC. it's being drawn from my existing CC (which, ironically, is a travel card. Lol)

 

[BoomerKwanger]

Very good suggestions and I'll be considering it for sure.

What's bothersome to me is that if we decide to go "all-in" on this, we're locking into their system for ALL our vacations from now on, and we're already mildly frustrated with it. Just not giving us a warm fuzzy getting, you know? I feel like we're going to be paying a LOT more for admittedly much nicer accommodations, but at the expense of having to deal with limiting ourselves to off-season, lack of available properties, etc. Nicer rooms are great, but i feel like getting a $200 hotel room is plenty nice and gives us a lot more freedom and flexibility.

Yeah, without knowing anything about your situation, I would generally advise either:
a) foreclosing and buying resale (you can get a 200k CWA contract for like $400 on ebay, or a bigger/nicer contract for still cheap that would let you go to places prime season)
b) foreclosing entirely and walking away
I'm only suggesting using what you have so you can figure out a vs b. Also, I have no idea if Wyndham would allow people to have contracts if they've foreclosed previously, so you might be forced into b regardless.

 

[Patri]

I think it’s fine if you walk. How do you stop the automatic withdrawal, though?
After you weather the consequences, if any, come back here and read. Maybe ts is right for you, maybe not. If you think you would like it, pick up a free or low cost unit. There are MANY available. For now, do what you have to do and make peace with it.

 

[ScoopKona]

How do you stop the automatic withdrawal, though?

Cancel the card. Get a new one.

 

[ScoopKona]

What's bothersome to me is that if we decide to go "all-in" on this, we're locking into their system for ALL our vacations from now on, and we're already mildly frustrated with it.

I'm a former timeshare salesman. (Not Wyndham.) You're not going to be able to use a timeshare -- any timeshare -- for all your vacations. None of them does everything. Otherwise we'd all be using this perfect system.

Some systems might be a great fit for you. Others less so. Or you might be the sort of person who has no business owning a timeshare.

While I think you should at least get a vacation or two for the money and trouble you have already spent, you SHOULD just walk away. If you decide later that Wyndham is the bee's knees, you can buy a resale. Or they will gladly sell you the same week again.

I love my timeshare. I loved it considerably more before we were bought out by a worse company. But it still works exactly the same way it did when I was selling it. (For now.) My wife and I can take our one week and trade that for anywhere between two and five weeks -- because we're flexible and don't need two-bedroom units during Easter break. The rest of the world zigs, we zag. Works for us. I penciled out the overall cost on another thread. Even though I paid full price (with a substantial discount because I paid myself the commission on my week), over 25 years of ownership, my total cost per night of vacation is $85. You can't get a hotel room for that. And we get a nice condo with a kitchen.

If we bought one of the more traditional timeshare systems where you buy a week, you trade it for a week, it's always a week, we'd hate our purchase. That doesn't make any sense for us.

If you think this might work for you, do a deep dive on all the name-brand timeshare systems and see if any appeal. If you ask people "what should I buy," most of them will answer with what they own. That isn't advice. It's validation. You really have to do the homework yourself.

 

[bnoble]

You're not going to be able to use a timeshare -- any timeshare -- for all your vacations. None of them does everything.

To put this another way: If you are currently taking a week or two of vacation a year, buying a timeshare only makes sense if you are willing to take more vacations than you are currently taking.

For me, that's the value proposition of a timeshare: It serves as a way to help redefine what vacations mean to me and how important I make them.

 

[ScoopKona]

To put this another way: If you are currently taking a week or two of vacation a year, buying a timeshare only makes sense if you are willing to take more vacations than you are currently taking.

For me, that's the value proposition of a timeshare: It serves as a way to help redefine what vacations mean to me and how important I make them.

We typically take two months each year. Only two or three weeks makes sense in a timeshare. The rest of the time is long weekends and places that aren't served by timeshare resorts. For instance, we have vintner friends in Paso Robles. No timeshares there. And we spend at least two weeks each year there -- various long weekends and "the weather here sucks, let's go to Paso" trips. I think anyone who lives on the mainland is going to have a similar mix of two-week, one-week, and weekend trips.

Once the big move to Hawaii is complete, all those weekend trips disappear. Timeshares may become even more useful. But we're planning on heading West, not East for our big vacations -- Japan, Thailand, India, etc. Having seen everything Europe has to offer, we sadly won't be going nearly as often.

 

[Passepartout]

Very good suggestions and I'll be considering it for sure.

What's bothersome to me is that if we decide to go "all-in" on this, we're locking into their system for ALL our vacations from now on, and we're already mildly frustrated with it. Just not giving us a warm fuzzy getting, you know?

There is no good reason for TS to be ALL your vacations. We cruise, do weekend RVing, when in Europe, it's usually 'managed apartments' or AirBnBs- because there are not a plethora of TSs where we want to go. Yes, we do probably use TSs 3+ times a year, but we are mostly retired, and in time, you will also find a balance between your work life, and the time you spend on your avocations.

You made the decision when you took up Wyndham on their offer. That you got cold feet afterwards is not their problem. If you default, it will be no skin off their nose. They will NOT feel bad about their 'shitty sales practice'. It works for them.

Best wishes for a solution you can live with.

Jim

 

[montygz]

We are literally $0 out of pocket at this point in time. Ok, i think there might have been some initial fees, but we got a loan for the down payment as well (it was one of those "6 months same as cash" deals). If we make the first payments on both loans, we'll be out about $500 or so i think.

Might have to think about your idea about using what we can, but it just feels wrong. Then again, shouldn't Wyndham also feel wrong about their shitty sales tactics?

My 2 cents is that no one should finance a timeshare. This will likely become an albatross at some point. You can rip off the band-aid now or suffer later. I would send in the recession paperwork anyway, even if it is past the deadline and then stay away. It may impact your credit, but the alternative seems worse to me.

You can learn about timeshares here on TUG and rent some stays to find out if buying resale is worth it.