WaikikiFirst
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will have to wait a few days for me to read details but BofA is out there bad-mouthing TS demand in general
We are still filling peak months but mud season is dead similar to pre-Covid.
Airfare is high right now. I hope they cut prices soon. We didn't buy our Europe fares until last minute this year because prices were crazy. Prices finally came down, but not as low as prior years, to take the trip but we almost cancelled.
Vacasa is owned by Wyndham and I think competes with AirB&B. IDK if it's any better run or not, or how the experiences go.something called Vacasa down 39%. I've barely heard of it. Almost a penny stock. No idea how big it is in what geography
I kind of hope this gives me some good opportunities lol. But somehow I doubt we'll see Hotel prices or the like trend down at all. To the extent any of this was driven by price gouging, maybe if demand keeps trending down we'll see it go lower.How does this compare to the rest of the travel industry? Covid revenge travel and work from anywhere is over so travel demand is soft. We can see it at our vacation rental in a resort town. People are booking at the last minute and rental prices are softer than in previous years. We are still filling peak months but mud season is dead similar to pre-Covid.
These loans are not generally held on the bank's books. In many cases, they are sold off as "whole bundles," meaning Hilton sells an entire month's or three months' worth of loans, which are then packaged together to either be held by an investor or sold as a packaged investment. Until about 2009, these loans could be sold, and if they went bad, they would become someone else's problem.Also the number of defaults is a negative balance on the Bank's Balance Sheet. How many Banks want to take over and sell a Timeshare when the purchaser defaults on the Loan. Plus they will probably be fighting with the Timeshare Corporation because the Maintenance Fees are also likely in Arrears.
From my understanding Loan Losses & Delinquency was far higher with Diamond Resorts than it ever was with Hilton. I think Diamond scrapped the bottom of the barrel too much and attracted lower-quality borrowers and buyers.And I wonder if there are higher defaults with the acquisitions, diamond, etc.?
Soft everywhere, travel, discretionary, car prices, McD introducing lower pricing meals, many $1 store closures, it's not surprising value brands and no brands like Aldi are expanding, Amazon's inventory is flooded with Chinese goods, TEMU is running wild, it is all revolving around AI/tech; which ironically will serve as a negative feedback loop for spending.How does this compare to the rest of the travel industry? Covid revenge travel and work from anywhere is over so travel demand is soft. We can see it at our vacation rental in a resort town. People are booking at the last minute and rental prices are softer than in previous years. We are still filling peak months but mud season is dead similar to pre-Covid.
I prefer when Margot explains itloans are not generally held on the bank's books
That movie, and specifically that scene, is a highly inaccurate portrayal of the Financial Crisis and the securitization process.I prefer when Margot explains it
Agreed.That movie, and specifically that scene, is a highly inaccurate portrayal of the Financial Crisis and the securitization process.
For example, it's not widely known that the vast majority of loans that originated during the boom years of 2004-2007 were actually paid on time. Over 90% of borrowers with subprime mortgages successfully paid off or remain paying their loans. Before the boom, this figure was around 92%. Interestingly, borrowers with good credit (Alt-A) loans and prime credit often performed worse than those with subprime mortgages.
Moreover, of all the subprime RMBS issued during those years, less than half a percentage point of AAA-rated bond certificates experienced losses. Those that did were primarily linked to "high loan-to-value" or "second mortgage" securitizations. The losses on those deals were particularly bad, because the final liquidation of the assets, tended to be substantially less.
When it comes to a Timeshare Mortgage, the general value upon liquidation is virtually $0. There is hardly ever a recovery when the unit is auctioned off at Foreclosure. A home in contrast, does retain some value and generally can be liquidated for the principle balance of the loan, plus delinquent interest and foreclosure-related costs.
Banks really don't lend money for timeshares. These "securitizations" are really a bunch of nonsense. The timeshare companies start out seller financing. Then they issue new notes and use the timeshare notes as collateral. They then sell the new notes to institutional investors. I suppose if the timeshare company defaults on those new notes, the institutional investors can come along and take over the timeshare notes (the collateral) and if the timeshare owners that signed those notes have defaulted then the institutional investors can foreclose on those timeshares. It won't happen. These securitizations are really just the timeshare companies borrowing a bunch of money from investors and making money on the spread.Also the number of defaults is a negative balance on the Bank's Balance Sheet. How many Banks want to take over and sell a Timeshare when the purchaser defaults on the Loan. Plus they will probably be fighting with the Timeshare Corporation because the Maintenance Fees are also likely in Arrears.
It isn't even that direct. The timeshare companies just issue new debt using the timeshare notes as collateral. They make money on the spread between the interest rate of the new debt and the interest rate on the timeshare notes. If the timeshare owner defaults, the investor that bought the new debt doesn't know, doesn't care and doesn't lose anything directly. The timeshare company is still obligated to pay the debt off.These loans are not generally held on the bank's books. In many cases, they are sold off as "whole bundles," meaning Hilton sells an entire month's or three months' worth of loans, which are then packaged together to either be held by an investor or sold as a packaged investment. Until about 2009, these loans could be sold, and if they went bad, they would become someone else's problem.
Unfortunately, in many cases, that doesn't even happen. While the strong Net Interest Margin is beneficial, oftentimes the excess interest is exhausted to cover defaulted and charged-off loans. This is where the over-collateralization and credit support in their recent issues have come from.It isn't even that direct. The timeshare companies just issue new debt using the timeshare notes as collateral. They make money on the spread between the interest rate of the new debt and the interest rate on the timeshare notes. If the timeshare owner defaults, the investor that bought the new debt doesn't know, doesn't care and doesn't lose anything directly. The timeshare company is still obligated to pay the debt off.
But, Margot Robbie in a bubble bath is welcome to any educational session for me... Even if they aren't accurate...