Yes. This is, IMO, precisely the catalyst that got some developers interested in beginning a deed-back program. However, the fundamental problem in the industry persists in that the product is based on real-estate and the reason why it has no or very low resale value is directly related to the archaic business plan that persists to this day.
It seems to me a simple solution for former DRI owners whose ownership is points only and there is no outstanding loan balance is to walk away if they wish to no longer use their points. There is nothing they HVC can do as far as hurting credit scores or bringing a lawsuit because nothing is deeded.
The majority of the timeshare systems don’t want a deed back program. It means they have to take back what they might not want. MVC and Wyndham have ways of giving back points/deeds but most of the other systems do not, at least not low cost/free.
well they dont want an ever increasing % of delinquent/defaulted owners they have to foreclose on either!
Mike Flaskey said in a fairly recent video that he doesn't expect the big brand name developers to go after the timeshare exit industry as hard as they did with DRI. He said they may try and sue them and settle when the exit company to promise to not touch their customers anymore. He didn't think the brands don't want to get involved in that type of litigation in order to protect the bigger hotel brand that some of the developers are beholden to. Talks about it at the 20:37 mark.
Deeding back to the HOA is almost the same as owners defaulting. The HOA are the owners and unless they can somehow rent out the inventory they took back, they will just pass the extra costs on to the other owners. Having the developer take back unwanted weeks is the best way to keep the system healthy. It just may not be all that healthy for timeshare developers.
Wesley Financial is owned by a guy who formerly managed VO Group, a timeshare exit company forced to shut down by the courts due to multiple frauds. He says he invented the Timeshare Exit industry, which is true, he showed others how to scam. In the ad, he says they won a court case against a large timeshare company, but it was a libel case, not an "exit" case. They also advertise on local iHeart Radio stations and the app. So, the tens of thousands he steals from customers, he's using to advertise his fraud.
except in most cases its far more expensive in the long run for the resort to go thru the foreclosure process, even in states where such process is streamlined.
thats absolutely true, because it exposes the glaring problems with resale value and timeshares. to be avoided until it becomes too expensive to avoid!
Very interesting. I like how former timeshare CEOs say things like it is. You won't hear that kind of reasoning and verbiage used when they are a current CEO. Also, he provided a great explanation on dynamics when fighting exit companies.
On the surface, yes. But it's avoiding a lot of legal troubles. While the end result is the same - the deed is owned by the HOA - a lot of legal work that involves time and money doesn't need to happen. Of course - the question is, if the HOA makes it easy to deed back, will there be significantly more deedbacks? It's entirely possible that a credit hit is the only thing that keeps many owners uphold to the contract they legally signed.
no question whatsoever the fear of the consequences of defaulting keeps a significant % of owners continuing to pay their annual dues...
I agree that deeding back to the Developer is preferred since they have a network to market the timeshare for resale. However, deeding it backt to the HOA at least gives the HOA the opportunity to do something with the timeshare.(sell or rent it) On another thread that was discussing the effect that defaulting owners had on maintenance fees a number of TUG members took the postion that the HOA couldn't do anything proactive about defaulting owners and needed to just build into their maintenance fee calculation up to 10% or so of defaulting owners and not worry about it. I took the position that the HOA should try to rent the unit to get some income. However, other TUG members said that the HOA couldn't do that since they didn't own the unit. Well if the unit was deeded back to the HOA they would own the unit.
Came across this while reading Flamingo's audit:
Hopefully this is a sign of things to come with all of the HGVC properties to keep maintenance fees lower.
A lot of the branded developers have similar arrangements. So for those resorts that fall under a brand umbrella this can be great. For small independant properties, the only choice for the HOA is to try and resell the deeds or rent them out. The other owners have to make up for any shortfalls.
If the developer takes ownership and pays the maintenance on the unit they should get the rental income just like they should get the income from the sale when they sell the unit.
I agree with what you are saying. This is a benefit for being with a brand umbrella like HGVC. That could be a selling point that HGVC advertises that they do take back units and resell or rent them to relieve the owners who are no longer intertested in traveling.
It becomes unsold inventory outside of the club. Therefore, not limited by non-commerce clauses for mid-week stays, etc. They'll list on hilton.com and they're golden. And they pay the HOA for any mid-week cleanings provided, as per that same audit document (whether on unsold inventory or on club bookings).
Someone has to cover the maintenance fees until the unit could be resold. For a resort that would not move quickly, they would be on the hook until sold.
