Foreclosure consequences

[Artsondra]

What are the consequences of letting a timeshare (with Diamond Resorts) go into foreclosure?

 

[bogey21]

What are the consequences of letting a timeshare (with Diamond Resorts) go into foreclosure?

If you don't have a loan outstanding, they will take it back if you ask. If you have an outstanding loan, the consequences will be the same as defaulting on any other debt.

George

 

[Artsondra]

I've never defaulted on a debt before now, so, other than for a hit on my credit report (and I'd like to know how long that lasts), I do not know the consequences of defaulting on my loan.

 

[silentg]

Why? Contact the resort and see if they will take it back, doesn't hurt to ask

 

[TUGBrian]

DRI has an official surrender program where you can give your week back for a $250 fee (assuming its paid off).

if you have a loan attached, you would technically be defaulting on two separate items...the first being your ownership with diamond...the 2nd being the loan you took out to purchase that ownership and its likely thru a 3rd party lender (barclays is common with diamond ownerships).

http://tug2.net/timeshare_advice/stop_paying_for_timeshare.html

 

[Artsondra]

The loan is already in default according to Diamond. In October 2016 We purchased an upgrade to an existing contract (We were told by the salesperson that it was a new contract and we would only have one payment so we assumed all former contracts were combined into the one new contract). After we got home we looked at the contract and our finances and determined that we could not afford it so we sent in a cancellation of contract (within the allotted time) and received a letter from Diamond that they had received and accepted the letter of cancellation. In November 2016, I sent an email to Diamond asking them if this cancellation (please remember we did not know it reverted to the former contract, we thought the cancellation was for everything) included the points that we had already bought and paid for. Diamond emailed back the reply that when we cancelled the contract ALL points were cancelled. This further confirmed to us our assumption that the ENTIRE contract had been cancelled. In addition, We stopped receiving advertising emails from Diamond. All email and postal mailings from our Diamond membership in Interval International ceased. Everything had been cancelled as we had assumed it to be, or so we thought.
We heard NOTHING from Diamond until June 2017 (almost 8 months later) when we started receiving a plethora of phone calls from Diamond informing us that our loan was seriously past due and headed for default. We have neither the ability nor the desire to pay any more money to Diamond than we have to. We also cancelled the Barclay card at the same time we cancelled the contract back in October 2016 and all money charged on that card was resolved. Our loans made before then were all directly with Diamond.
We were current in our payments to Diamond at the time I sent the email to them asking about previously paid for points. If, as Diamond claims, our cancellation in October 2016 merely meant a reversion to a former contract, WHY DID DIAMOND TELL US ALL POINTS WERE CANCELLED?

Thanks for letting me vent here. I'm not really asking for answers to my situation with Diamond but I would like to know the consequences of defaulting on this loan if Diamond persists in going in that direction.

Thanks!

 

[TUGBrian]

is a bit confusing for sure, and im not quite sure how cancelling the barclays card would somehow resolve you of the money owed to them unless you transferred the balance to another source?

it certainly sounds like a tough spot, and if DRI already has informed you that you are already in foreclosure there is not likely much you can do at this point accept wait for them to send you correspondance (and or collections agencies to start contacting you if applicable).

I am not quite sure what the overall goal here is. on one hand it looks like you want out of everything (without paying a penalty)...on the other it looks like you want to go back to an original ownership you had before you upgraded?

 

[mj2vacation]

Ask them to send you, in writing, what the consequences are. What some of these companies do is to dance around reality by using threats.

In many cases, TS developers do not actually report defaults on credit reports. They use the inferred threat to do so to get you to give them more money.

At some point, some of them will sell the debt to a third party who then attempts to collect. They may or may not report, but they will use the threat again.

This information is from an insider.

 

[Artsondra]

I'm trying to decide which consequences would be less financially painful. Letting the loan go into foreclosure? Or trying to work something out with Diamond that would make us keep the contract that we do not want and can't easily afford?
That's why I'm trying to find out what the consequences of foreclosure are before I decide which path to take.

 

[theo]

I'm trying to decide which consequences would be less financially painful. Letting the loan go into foreclosure? Or trying to work something out with Diamond that would make us keep the contract that we do not want and can't easily afford?
That's why I'm trying to find out what the consequences of foreclosure are before I decide which path to take.

If there is outstanding loan debt involved, there is frankly nothing to "work out" with DRI --- they most likley don't even hold the loan "note". You would need to pay off that loan debt before DRI could / would (...for a $250 fee) take back the "product".

It is a virtual certainty that defaulting on the loan will have credit report consequences. The assessment you need to make for yourself is the impact of that negative credit report upon other financial plans that you may have in the short term future (e.g., mortgage application, loan percentage rate, etc.).

 

[WalnutBaron]

I've never defaulted on a debt before now, so, other than for a hit on my credit report (and I'd like to know how long that lasts), I do not know the consequences of defaulting on my loan.

Your credit history will be negatively affected for 7 years from the time the default is reported to the credit agencies. Otherwise pristine credit (e.g. a score above 775) will likely drop into the low to mid-600's, resulting in higher interest rates for future loans until your credit rating recovers.

 

[Artsondra]

I have been in communication with DRI and think the way to go is with an attorney. The question I have for TUG is, Where can I find a good, knowledgeable attorney who can help my case against DRI? If it helps: I live in Tampa, Fl
Thanks

 

[Egret1986]

I have been in communication with DRI and think the way to go is with an attorney. The question I have for TUG is, Where can I find a good, knowledgeable attorney who can help my case against DRI? If it helps: I live in Tampa, Fl
Thanks

Michael Finn Law Group has been mentioned many times here on TUG. He seems to have a distaste for DRI and is located in Florida.

Good luck.

 

[TUGBrian]

TUG does not endorse or support any entity that charges large upfront fees for their services.

 

[LannyPC]

Michael Finn Law Group has been mentioned many times here on TUG. He seems to have a distaste for DRI and is located in Florida.

While he may be a competent, knowledgeable attorney when it comes to TSs, he does not have some sort of a magic wand that will make TSs disappear. Likely he won't be able to help you with a case of buyer's remorse or that you'd like to sue the sales person for lying to you.

 

[theo]

Michael Finn Law Group has been mentioned many times here on TUG. He seems to have a distaste for DRI and is located in Florida.

I have personally met Mike Finn; rest assured that his distaste for deceitful timeshare developer practices is certainly not limited to DRI.
Btw, the correct name of the firm is Finn Law Group, located in Largo, FL (very close to OP's location in Tampa).

That being said, I do not believe that Finn just takes on any and all cases, "willy nilly". My understanding (not from direct first hand experience) is that an extensive questionnaire is first completed by the prospective client for assessment, with no cost (yet) incurred. Michael Finn would be the first to tell you that (as LannyPC correctly notes above) he possesses no magic beans or secret elixirs and that "buyer's remorse" after the expiration of the rescission period, in and of itself, does not constitute a viable case. No harm (or cost) to just inquire I suppose, since OP is located so very close to Finn's law office.

 

[Asl18940]

I have been working with Mr. Finn. Everything was very, very upfront. The fee is not insignificant, but this is not something you'd want to do without counsel. He was able to get my onerous timeshares terminated (if you private message me I can give you the details), and there have been no credit consequences -- that was a term of the deal. What we used was a resale advertisement I found at one of the resorts that demonstrated that the timeshare company was reselling points at less than half of what I paid, and those re-buyers were entitled to ALL of the benefits the original owners had. That outraged me so much that I could not pay another dime toward the debt knowing this discrepancy, and Finn worked well on the matter. The properties were retaken by the timeshare company and are being auctioned off. There was no reference on my credit report at all.

 

[theo]

As I've indicated previously I have met (and I greatly respect) Mike Finn and I also admire his obvious contempt for shaky developer practices.

That being said, the wrinkle in the OP's situation which cannot be ignored in assessing the situation, is that there is still associated outstanding loan debt.
In all likelihood, the lender is a third party entity (not Diamond itself) which considerably complicates (and significantly diminishes) any prospects for either successful negotiation or litigation. I wish the OP well, but am unconvinced that ponying up for attorneys will mitigate the harsh reality of the loan debt.

Foreclosure on a "paid up" ownership may not result in any consequences, depending on the practices and energy level of the individual resort / chain.
Defaulting on a loan obligation is, however, a different kettle of fish and is virtually certain to have negative credit report consequences (for seven years).