Marriott-Timeshare Exit - any other options or simply default

[ejp]

Denise, you responded in Sept 2021 on a question regarding Marriott Cypress timeshare. The scenario was actually for my sister and mother in law who had stop making payments and we understand they have gone to an attorney to assist in trying to get out of Marriott. They also have a loan for the Marriott destination club owing past maintenance and a loan under $1200 remaining . Not sure if this was smart but they have no other options. They have over 6000 dvc points pt year and are trying to divest themselves of this

We've been reaching out to various exit teams including Primo Group, Centerpoint, Newton Group, Forsa and it is highly confusing whether they are simply going to advise foreclosure/default and "guarantees" we can cancel the contracts. We personally want to get out of our other timeshare which is with Breckenridge Grand Vacations but owe a very large loan. It has become a financial nuisance and burden. To anyones knowledge, have any Tuggers had success in getting out of a timeshare if they still have a balance due? I have research a debt repair company called Tradebloc and wondered if you have heard of them and of their timeshare cancellation history/services. We've also contacted Breckenridge Grand Vacations and they are strong arming us to keep paying the fee and loan or will report us to a collection agency. Are we just at the mercy of the Timeshare firm and or can we walk away with out wage garnishments and most likely a large credit ding that we will have to live with for the next 7 years. Can a credit repair company be the answer versus an exit company. I'd appreciate any comments -

Moderator Denise ask me to post here.

 

[bogey21]

There is no easy way out particularly when a loan is involved. Clearly stay away from the exit teams. They will just cost money and do nothing. Probably the best thing to do is to stop paying the Resorts and the attorney. The money saved will probably exceed the damages to your/their credit, etc...

George

 

[dioxide45]

Based on what you have shared here and in PM, the easiest one to deal with is the Marriott ownership and Destination Club points. It seems Cypress Harbour is paid in full with no defaulted fees. The 6,000 DC points have about $3000 in fees and $1200 in loan outstanding and another $3000 in fees coming due. The easiest way out of this is to pay the outstanding and upcoming fees and also pay off the remaining loan balance. The points could then be sold for about $2.50 per point. That would in the end pay back everything that had to be paid to bring everything current and still have cash left. Of course, it won't come close to covering what was paid to buy these points originally from Marriott.

I can't really speak too much to the other Colorado weeks as I don't know much about the value, but with so much of a loan still outstanding, you don't have many options. If you are okay taking the chance of a credit hit, then you could default and let the lender foreclose. You would then have to rebuild your credit which can take a while. You would also want to verify that Colorado is a non-recourse state. Meaning that they can't still come after you for any amounts outstanding from the loan after the foreclosure. @Grammarhero has a thread that provides links to individual state laws about timeshare that you probably want to read up on.

 

[TUGBrian]

think id certainly pay "less than 1200 bucks" to pay off the loan before I bothered to entertain lawyers or exit companies....

 

[Dean]

I wouldn't throw good money after bad. For the MVC options one should be able to sell and do so without paying additional currently and then pay any fees out of the proceeds as part of the closing. I'd do so soon because the fees are coming due and at some point, MVC will foreclose and take it anyway. That way one should net some money from the process. For the CO option I can't speak specifically for that timeshares or CO law but in general I wouldn't pay more until I made a decision on the end point. IMO all of the exit companies and credit repair options are junk. Some are scams and some just bad choices but I'd avoid them. If you can't sell, I'd investigate CO law as to what is likely to happen after default. Generally when one is already in a bind their credit rating is already affected so that often is not an important variable. Of course if one can pay their obligations and just don't want to, that is another matter. If one stops paying it's likely they can settle later for a much reduced amount. Whether the company will report to the credit agencies or not is unknown but many don't. Good luck, I'm sorry you are all going through this.

 

[ChrisSteele]

I've said this on another thread and to be fair I might not have the process correct but I think people need to use the Marriott's ROFR against them if they want to get rid of their points. Four days ago, on 11/6, www.rofr.net is showing a failed attempt to sell points at $3/point and a passing attempt at $3.50. I think it is a relatively safe bet that they will get scooped up by Marriott if you list them for $3/point. I think your MIL should list the points on Red week, then you make an offer for $3 immediately; Marriott will almost certainly scoop them up for that price. Your MIL walks away with $18k-$1200 loan - past due maintenance fees. Hopefully the remainder will be enough to cover any outstanding fees on the Cypress Harbour property. You could even do the same tactic with that property too. You know you're never going to make your money back, you might as well just cut your losses to stop the bleeding.

 

[Dean]

I've said this on another thread and to be fair I might not have the process correct but I think people need to use the Marriott's ROFR against them if they want to get rid of their points. Four days ago, on 11/6, www.rofr.net is showing a failed attempt to sell points at $3/point and a passing attempt at $3.50. I think it is a relatively safe bet that they will get scooped up by Marriott if you list them for $3/point. I think your MIL should list the points on Red week, then you make an offer for $3 immediately; Marriott will almost certainly scoop them up for that price. Your MIL walks away with $18k-$1200 loan - past due maintenance fees. Hopefully the remainder will be enough to cover any outstanding fees on the Cypress Harbour property. You could even do the same tactic with that property too. You know you're never going to make your money back, you might as well just cut your losses to stop the bleeding.

As long as one is prepared to complete the sale if they pass on it then that would be fine. Otherwise I believe this to be both illegal in all states I'm aware of and fraud as Real Estate laws would apply here.

 

[dioxide45]

As long as one is prepared to complete the sale if they pass on it then that would be fine. Otherwise I believe this to be both illegal in all states I'm aware of and fraud as Real Estate laws would apply here.

It would simply turn into a breach of contract dispute. Mother could sue son to force them to buy the points. I have seen many here mention not following through when Marriott exercises ROFR. Not sure this would be any different.

 

[Dean]

It would simply turn into a breach of contract dispute. Mother could sue son to force them to buy the points. I have seen many here mention not following through when Marriott exercises ROFR. Not sure this would be any different.

Submitting a contract for the purpose of forcing ROFR with no intent to complete same is a violation of real estate laws in all states I know of as it's not a valid contract. While I believe it unlikely that anything would happen either by legal action from MVC or from a criminal direction, it doesn't change the facts. My ethics are worth more than that.

 

[jmhpsu93]

Submitting a contract for the purpose of forcing ROFR with no intent to complete same is a violation of real estate laws in all states I know of as it's not a valid contract. While I believe it unlikely that anything would happen either by legal action from MVC or from a criminal direction, it doesn't change the facts. My ethics are worth more than that.

While I share your same ethical orientation, Dean, I'm not sure ethics has any part of timeshare transactions.

 

[TheTimeTraveler]

I believe advertising the points @ $2.99 per point would produce a quick sale to someone on the open market and one wouldn't have to worry about any ethics issues.......



.

 

[bogey21]

I believe advertising the points @ $2.99 per point would produce a quick sale to someone on the open market and one wouldn't have to worry about any ethics issues.......

But do they have the money to bring everything current before selling. Alternatively if the sale proceeds are large enough it may be possible to use them for this at closing....

George

 

[Dean]

While I share your same ethical orientation, Dean, I'm not sure ethics has any part of timeshare transactions.

Maybe not as I don't believe in situational ethics so the fact this is a timeshare sales company would not enter into my equation. To me ethics is about my behavior, not other people. So committing fraud and violating state laws would be unethical as a minimum to me.

 

[ejp]

Thanks everyone for your comments. I will sw my sister-in-law and we'll find out if she can post the points for sale after speaking with Marriot reps/owner modifications on her ability to sell these and to use proceeds to pay off HOAs and outstanding loan. She just wants to get out.

 

[Grammarhero]

Denise, you responded in Sept 2021 on a question regarding Marriott Cypress timeshare. The scenario was actually for my sister and mother in law who had stop making payments and we understand they have gone to an attorney to assist in trying to get out of Marriott. They also have a loan for the Marriott destination club owing past maintenance and a loan under $1200 remaining . Not sure if this was smart but they have no other options. They have over 6000 dvc points pt year and are trying to divest themselves of this

We've been reaching out to various exit teams including Primo Group, Centerpoint, Newton Group, Forsa and it is highly confusing whether they are simply going to advise foreclosure/default and "guarantees" we can cancel the contracts. We personally want to get out of our other timeshare which is with Breckenridge Grand Vacations but owe a very large loan. It has become a financial nuisance and burden. To anyones knowledge, have any Tuggers had success in getting out of a timeshare if they still have a balance due? I have research a debt repair company called Tradebloc and wondered if you have heard of them and of their timeshare cancellation history/services. We've also contacted Breckenridge Grand Vacations and they are strong arming us to keep paying the fee and loan or will report us to a collection agency. Are we just at the mercy of the Timeshare firm and or can we walk away with out wage garnishments and most likely a large credit ding that we will have to live with for the next 7 years. Can a credit repair company be the answer versus an exit company. I'd appreciate any comments -

Moderator Denise ask me to post here.

@ejp Does your sis or MIL own Marriott Cypress, in Orlando FL or in CA? If so, CA and FL are both anti-deficiency states, meaning the foreclosure sale will not result in a deficiency balance lawsuit, even of the sale proceeds do not cover the cost of your loan. However, Marriott can wreck your credit.
Below are some FL laws. Mind sharing if your CO TS default led to a credit drop?

Statutes & Constitution :View Statutes : Online Sunshine (state.fl.us)

Operative Language: “If you do not object to the use of the trustee foreclosure procedure, you will not be subject to a deficiency judgment even if the proceeds from the sale of your timeshare interest are insufficient to offset the amounts secured by the lien.”

 

[Grammarhero]

Thanks everyone for your comments. I will sw my sister-in-law and we'll find out if she can post the points for sale after speaking with Marriot reps/owner modifications on her ability to sell these and to use proceeds to pay off HOAs and outstanding loan. She just wants to get out.

@ejp We hope you are well and healthy. If your SIL make the difficult decision to default, please kindly let us know if her credit got affected. It would help tuggers in similar situations moving forward.

 

[DanCali]

Submitting a contract for the purpose of forcing ROFR with no intent to complete same is a violation of real estate laws in all states I know of as it's not a valid contract. While I believe it unlikely that anything would happen either by legal action from MVC or from a criminal direction, it doesn't change the facts. My ethics are worth more than that.

While I get your point, I don't see how a ROFR cannot be "forced" by definition. It's their choice to exercise that right.

As for someone getting sued because they had no actual intent of buying, I agree there is an ethical issue there, but contracts fall through all the time for a variety of reasons. I've cancelled a couple of purchases myself due to buyer's remorse, misunderstandings about reservation dates, or slow-to-respond seller agents (RedWeek). I have 8 completed resale transactions and 3 canceled ones, which is a pretty high cancelation rate that may or may not be representative. But I doubt any reasonable third party will use resources to explore why a timeshare deal fell through.

 

[Dean]

While I get your point, I don't see how a ROFR cannot be "forced" by definition. It's their choice to exercise that right.

As for someone getting sued because they had no actual intent of buying, I agree there is an ethical issue there, but contracts fall through all the time for a variety of reasons. I've cancelled a couple of purchases myself due to buyer's remorse, misunderstandings about reservation dates, or slow-to-respond seller agents (RedWeek). I have 8 completed resale transactions and 3 canceled ones, which is a pretty high cancelation rate that may or may not be representative. But I doubt any reasonable third party will use resources to explore why a timeshare deal fell through.

I'm not sure you do given you're trying to rationalize it. IMO this is, at it's core, a question of one's honestly and integrity. I too have canceled contracts but always within the terms of the contract or with the agreement of the other party. I gave the other party accurate information, had I not, it would have been dishonest. I could have used the term triggered instead of force, in this context it would have the same meaning. Whether a company or individual would pursue the other party is really irrelevant IMO. For a timeshare purchase one has a legal right to cancel in many situations within a time frame which varies state by state and often, based on the information provided to the buyer. In some states those legalities apply to resale buyers as well, they do in FL. This is not applicable to ROFR. Normally one doesn't or shouldn't present for ROFR until after that period has past.

Here's an example of something that's technically legal but is dishonest and not ethical IMO. Say one wants to buy a certain type of time timeshare and they make several offers and accept two of them legally. Then they cancel one of them later because they never intended to buy both. It really comes back to intent. To have a side deal that is different than what one presented to MVC related to ROFR is simply dishonest and, as I understand it, illegal. But let me turn it around. Say you did everything in good faith but simply have a problem with MVC getting it at that price so after they say they'll take it, you decide you want to cancel. They will normally allow you to do so, but you ask and they say yes or no and you proceed accordingly.

 

[DRH90277]

Let me think. So, Marriott Vacation Club made changes after we purchased points. They imposed education fees, transfer fees, etc. to raise the price of a point for a purchaser by say $5+ per point on top of the agreed resale purchase price to the buyer. These additional fee impositions adversely impacted the resale value of every point. Resale prices dropped. These fees also inadvertently, I'm sure, improved the margin on points when MVC sells the points again.

And I should be worried about a lowly owner who tries to game the ROFR system? Hmmm, I need more time to think about this.

My $5+ upcharge for junk fees might even be understated. What are the current upcharges per point for a resale points buyer (beyond what the seller gets)?

 

[Dean]

Let me think. So, Marriott Vacation Club made changes after we purchased points. They imposed education fees, transfer fees, etc. to raise the price of a point for a purchaser by say $5+ per point on top of the agreed resale purchase price to the buyer. These additional fee impositions adversely impacted the resale value of every point. Resale prices dropped. These fees also inadvertently, I'm sure, improved the margin on points when MVC sells the points again.

And I should be worried about a lowly owner who tries to game the ROFR system? Hmmm, I need more time to think about this.

My $5+ upcharge for junk fees might even be understated. What are the current upcharges per point for a resale points buyer (beyond what the seller gets)?

The changes made were consistent with the contract we all signed up for, namely the POS.

 

[dioxide45]

Let me think. So, Marriott Vacation Club made changes after we purchased points. They imposed education fees, transfer fees, etc. to raise the price of a point for a purchaser by say $5+ per point on top of the agreed resale purchase price to the buyer. These additional fee impositions adversely impacted the resale value of every point. Resale prices dropped. These fees also inadvertently, I'm sure, improved the margin on points when MVC sells the points again.

And I should be worried about a lowly owner who tries to game the ROFR system? Hmmm, I need more time to think about this.

My $5+ upcharge for junk fees might even be understated. What are the current upcharges per point for a resale points buyer (beyond what the seller gets)?

The initiation fee started out at $250 per Beneficial Interests or $1 per point (with a $1500 minimum *IIRC*). It was subsequently increased to $750 per Beneficial Interest or $3 per point (with a $3000 minimum). The $300 owner education fee hasn't changed. If they want to, they can effectively make the points worthless on the resale market. These garbage fees are in line with how many Mexico timeshare companies operate. Yes, Marriott sunk to that level in 2010.

 

[DRH90277]

The changes made were consistent with the contract we all signed up for, namely the POS.

Dean, help me out. I've read many of your posts and you seem to understand the program.

What is POS? My imagination makes me think of something pretty bad.

Did MVC set out the specific upcharges to be imposed on a buyer of my resale points required to make the points usable to the buyer in any buyers purchase documents? Probably not.

This could be a work around of our purchase contract. It could be MVC thought they could charge a purchaser these fees upon resale to allow the purchase to go through (without regard to the impact on the sales price for the seller). However, the seller does take a serious hit (maybe a 60% drop in market value) because of the devaluation of his point values as impacted by these fees. So MVC gets transaction fees of about twice the sales price amount directed to the seller. A purchaser owns an asset that becomes near worthless upon purchase.

Or was it a general statement such that MVC could make any changes to the program without giving notice and/or considering the impact on owners?

 

[dioxide45]

What is POS? My imagination makes me think of something pretty bad.

Public Offering Statement. Not the other thing you are thinking of, but that may be a good definition too

 

[Dean]

Dean, help me out. I've read many of your posts and you seem to understand the program.

What is POS? My imagination makes me think of something pretty bad.

Did MVC set out the specific upcharges to be imposed on a buyer of my resale points required to make the points usable to the buyer in any buyers purchase documents? Probably not.

This could be a work around of our purchase contract. It could be MVC thought they could charge a purchaser these fees upon resale to allow the purchase to go through (without regard to the impact on the sales price for the seller). However, the seller does take a serious hit (maybe a 60% drop in market value) because of the devaluation of his point values as impacted by these fees. So MVC gets transaction fees of about twice the sales price amount directed to the seller. A purchaser owns an asset that becomes near worthless upon purchase.

Or was it a general statement such that MVC could make any changes to the program without giving notice and/or considering the impact on owners?

As dioxide noted, it's the Public Offering Statement. Any changes have to be consistent withs the legal language but doesn't necessarily have to be spelled out in the exact way. You read it basically like you would a state Statute. There is specific language that gives them such options. There are also statements to the effect that one should not buy to rent or sell later and that if one does, they are in direct competition and at a competitive disadvantage in doing so. There are also statements that one should buy for personal use. IMO anyone who buys a timeshare should understand what their getting into including the risks which include changes and for a new purchase at least, should read the POS. IMO most changes in timeshare over the years are negative to current owners as a whole. Change is the one constant with owning a timeshare IMO. Realize that a timeshare developer doesn't want you to be able to resell at all. They can't actually prevent it but would if they could. All they can do is make it difficult or potentially. The reality is that timeshare are a specialty product and while market forces do have an effect on price, it's not as consistent or direct as say the prices of an automobile or stock. Also realize that for all the POS's I've seen over the years, there is language that would bind a new buyer whether they knew it or not. I'd suggest you read at least one POS from cover to cover.

At it's core, ROFR with timeshares is not about buying options cheaply as much as it is about creating uncertainty and doubt which will cause a certain % of people to buy retail no matter the cost difference. That's not to say MVC or other such companies are opposed to making some additional profit on taking back a resale but this is not their main objective. Also realize that the actual profit on an individual contract they take is a LOT less than many would think it is.

I don't have any sympathy for a dishonest company but I do not believe two wrong's make a right. My statements in discussion here are about an individuals integrity and honesty or lack of. As I've said before, I don't believe in situational ethics at least anything less than the immediate safety of my family.