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DRI's Devbuyback program is dead

dougp26364

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I guess that's as appropriate of a heading as you can get since it's halloween.

I just received a call from the director of operations after making a post on the DRI forums. As of Oct. 1st, all offers and deals that had not been paid out were recsinded. The entire department was shut down. If you had a deal but haven't received a check, the chances you'll get one are slim and none.
I guess letting owners know in a timely manner or keeping the phone line open with a recorded message wasn't important to them. If you had a deal with them and haven't received a check, all I can say is good luck. :rolleyes:
 

nightnurse613

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I'm not too happy with them right now either. They have posted my MF for over a month now but I have not received official notification (of the increase!!) Additionally, when I call the automated line says my fees are PAST DUE. They did upgrade their website but I still haven't figured out what changes they made (other than cosmetic)!
Augh, 1000th POST! I need to get a life.:crash:
 

lv_maui

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DRI and Inventory

It does not surprise me that DRI canceled the program. But the reason is really good business.

With the economy in the tank, the delinquencies of maintenance fees and from mortgage receivables with be up by major amounts. If your HOA only budgeted 5% or less for maintenance fees delinquencies, be prepared for much worse results.

Because of these delinquencies, DRI will be able to acquire the related inventory and re-sell it. And since they have this program, DRI will probably not do any new development since they will have plenty of inventory.
 

timeos2

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It does not surprise me that DRI canceled the program. But the reason is really good business.

With the economy in the tank, the delinquencies of maintenance fees and from mortgage receivables with be up by major amounts. If your HOA only budgeted 5% or less for maintenance fees delinquencies, be prepared for much worse results.

Because of these delinquencies, DRI will be able to acquire the related inventory and re-sell it. And since they have this program, DRI will probably not do any new development since they will have plenty of inventory.
How would DRI acquire the inventory? They have no rights to it (unless they hold any mortgage). If the resorts are forced to take back weeks they belong to the resorts, not DRI (or any other developer). They'd have to buy those rights. No money and no sales is still a problem (just as it apparently was for the buy backs).

It's going to be very interesting how the collection percentages look after the 1st of January. If they really goes south the future for many resorts will be problematic. Until the reports are in there is no way to know.
 

dougp26364

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How would DRI acquire the inventory? They have no rights to it (unless they hold any mortgage). If the resorts are forced to take back weeks they belong to the resorts, not DRI (or any other developer). They'd have to buy those rights. No money and no sales is still a problem (just as it apparently was for the buy backs).

It's going to be very interesting how the collection percentages look after the 1st of January. If they really goes south the future for many resorts will be problematic. Until the reports are in there is no way to know.

I can't say what happens with other DRI managed resorts but, at Polo Towers, every so often the HOA auctions off units for sale. I've always assumed these were probably units the HOA forclosed on.

While I realize this is something of a leap, if forclosures were to jump and, the HOA/BOD held auctions of those units that were not agressively advertised, the DRI could in essence buy those units back at a fraction of the cost of their Devbuyback program.

In my mind it's still a rather far fetched idea. The inventory I've seen offered on the Polo Towers website for these occasional auctions hasn't been that many units and, the unit weeks themselves haven't been that attractive. Even if those numbers doubled or tripled DRI wouldn't be getting a significant number of weeks this way. At least not out of Polo Towers.

The most logical conclusion is that the credit markets dried up. It's not logical for DRI to increase inventory that's going to cost them money when they can't sell the notes that back the mortgage on a sold unit week. Essentially, buying back units decreases cash on hand and increases liablity. I doubt they would want even the forclosed weeks back for the HOA as that would make DRI responsible to the HOA/BOD for the MF's on those unit weeks until sold. Good business practice wouldn't be to spend cash and increase expenses when they already have ample inventory for this market. All developers are scaling back their plans. I'm sure DRI is only doing the same.
 
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falmouth3

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Very true. I was in the process of selling my week back to DRI since June. Doug posted here and was kind enough to provide me with a contact. After another several weeks of phone calls back and forth, In November, I was finally called and told that the sale was off. No compensation for the time that it was off the market, and had dropped precipitously in value.

It was also late to get the most value for the 2009 week that I had reserved. Luckily one of my co-workers decided that it was exactly where she wanted to go on vacation and she rented it from me. I'll put it back on the market and see what it brings.
 

lv_maui

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How would DRI acquire the inventory? They have no rights to it (unless they hold any mortgage). If the resorts are forced to take back weeks they belong to the resorts, not DRI (or any other developer). They'd have to buy those rights. No money and no sales is still a problem (just as it apparently was for the buy backs).
ON the face, your question is valid. However, many HOA's enter into an agreement to sell this weeks to the developer at a good price since the developer is buying hundreds. Since DRI controls the boards in most cases, they have the ability to do this. Whether this is arms length is questionable, but I think everyone can justify it.
 

dougp26364

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ON the face, your question is valid. However, many HOA's enter into an agreement to sell this weeks to the developer at a good price since the developer is buying hundreds. Since DRI controls the boards in most cases, they have the ability to do this. Whether this is arms length is questionable, but I think everyone can justify it.
You're assuming that the developer could get foreclosed units without having to pay off the balance of any mortgage left on those units. Since developers bundle and sell those notes to investment banks, they would have to pay off any balance to get clear title. It's not as easy as picking them up for nothing.

With credit being as tight as it is right now and, with DRI having plenty of inventory, I'd be surprised if DRI would even allow owners to just give their units back.
 
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