Mortgage recital to exit timeshare?

[lworks86]

First let me say I did not read all the post that advise what NOT to do when hiring a Timeshare exit company. Big mistake. I paid about $6300 to an exit company to exit my Diamond timeshare (multiple contracts) and another $500 to their preferred attorney company to do the legal work. After some issues by both companies, the attorney company came back and offered for another almost $9k this mortgage recital. Has anyone used this before?

I don’t like the highlighted part “However, you will still have the liability of the timeshare.” I was told that the lifetime protection would handle that. What exactly can a company do to correct “Credit Report Damage”? As I understand it, they can challenge it multiple times but, in the end, if it is a liability, what can they do? This is the blank recital with the company blanked out:



WHEREAS,___________, (“Client(s)”) owner(s) of ___________ timeshare interest. WHEREAS, the owner(s) are delinquent in making payment(s) for the maintenance fee/club dues/assessments and/or the loan payments relating to the Timeshare, Contract Account Number: ___________ WHEREAS, ____ ___. has negotiated with the above mentioned timeshare and you are hereby entering into the release of your Timeshare(s) Interest. By signing this Recital, your ownership and interest is absolved and you will not have any rights or obligations to use the said timeshare. However, you will still have the liability of the timeshare. THEREFORE, _______ Inc., will provide a lifetime protection policy from said liability, which consists of: a. Credit Report Damage b. Tax Liability / 1099d c. Deficiency balance resulting in garnishment/lawsuit FURTHERMORE, This Recital is $________. This is a one-time cost: includes the required fees for processing and restocking; and the lifetime protection policy. _____ guarantees that if we cannot satisfy or resolve these issues, based on your full cooperation, we will 100% refund the full amount of $________. Additionally, by Client’s(s’) signature below, the Client(s) agree they will make no future effort to use the Timeshare Interest(s) listed in this Recital. Client also agrees that any or all further correspondence from your timeshare should be directly forwarded to _____ and you will cease all communication with said timeshare.



The sales pitch from the original exit company were the typical questions of: were you misled, pressured, 90 minutes vrs hours etc. We have a A+ BBB rating yada, yada, yada. After payment and they get started you find out the real strategy is to stop all payments and go into default. Now I am stuck. Suggestions?

 

[kanerf]

Good money after bad, sorry.

 

[dioxide45]

This is the reality of timeshare exit industry, just have you default and then they may try to negotiate to get you out or wait for foreclosure. THis is no different than credit counselling. Something that gets a lot of these companies in trouble with state attorney generals. In certain cases the right off of a timeshare loan can trigger a 1099-C. In certain states, you are better to allow them to simply foreclose and if there isn't a deficiency judgement then they won't/can't issue a 1099-C.

 

[lworks86]

This is the reality of timeshare exit industry, just have you default and then they may try to negotiate to get you out or wait for foreclosure. THis is no different than credit counselling. Something that gets a lot of these companies in trouble with state attorney generals. In certain cases the right off of a timeshare loan can trigger a 1099-C. In certain states, you are better to allow them to simply foreclose and if there isn't a deficiency judgement then they won't/can't issue a 1099-C.

good to know. Do you happen to have any info for Virginia? I have Diamond contracts, all in Virginia

 

[RX8]

@lworks86 First off, sorry you are out $6800. Secondly, you certainly want to hold on to the other $9000 and not give it to these scammers.

If I am understanding this correctly, this exit company charged you $6800 just to have you default and go into foreclosure. That is a major scam of $6800 because you could have done that yourself for free. They did absolutely nothing on your behalf for that $6800. Now, they want an additional $9000 for a “lifetime protection policy”. Truly sad that they are taking advantage of timeshare owners like this.

These exit companies have just one goal - collect as much upfront fees as possible for as little work as possible. They will also come up with new ways to get even more upfront fees, as evidenced by this lifetime protection BS.

Certainly no guarantees but odds are you won’t have a credit hit (unless there is a mortgage and even then, still might not happen), there won’t be a 1099C, won’t be a garnishment, and won’t be a lawsuit. These scammers know that so they’ll happily take your $9000. They will also fight any refund request of that $9000, that is if they aren’t out of business by the time you request it.

What is the name of this exit company?

 

[lworks86]

@lworks86 First off, sorry you are out $6800. Secondly, you certainly want to hold on to the other $9000 and not give it to these scammers.

If I am understanding this correctly, this exit company charged you $6800 just to have you default and go into foreclosure. That is a major scam of $6800 because you could have done that yourself for free. They did absolutely nothing on your behalf for that $6800. Now, they want an additional $9000 for a “lifetime protection policy”. Truly sad that they are taking advantage of timeshare owners like this.

These exit companies have just one goal - collect as much upfront fees as possible for as little work as possible. They will also come up with new ways to get even more upfront fees, as evidenced by this lifetime protection BS.

Certainly no guarantees but odds are you won’t have a credit hit (unless there is a mortgage and even then, still might not happen), there won’t be a 1099C, won’t be a garnishment, and won’t be a lawsuit. These scammers know that so they’ll happily take your $9000. They will also fight any refund request of that $9000, that is if they aren’t out of business by the time you request it.

What is the name of this exit company?

Until I finalize a few things, I rather not reveal the company names. When the dust settles and if they don't deliver, then both company names will absolutely be posted on every website I can find and every relevant BBB site.

 

[RX8]

Until I finalize a few things, I rather not reveal the company names. When the dust settles and if they don't deliver, then both company names will absolutely be posted on every website I can find and every relevant BBB site.

I can appreciate that. That said, unless you are going to risk an additional $9000 the only thing they are going to “deliver” is either your foreclosure or the Diamond deedback program (if eligible), which you could do yourself. The paperwork, since it says you are still liable, makes me believe it is a foreclosure. Wish you luck.

 

[csalter2]

Until I finalize a few things, I rather not reveal the company names. When the dust settles and if they don't deliver, then both company names will absolutely be posted on every website I can find and every relevant BBB site.

Sounds like TS Solutions. They called me yesterday and I listened to their dribble this morning. The last thing they tell you on their phone presentation is the cost which is based upon the amount of your maintenance fees. I didn’t write the numbers down but they were between $3500 and about $6800 for one contract or timeshare you want to get from under. It was sad because I know they will get some takers.

 

[Kozman]

If you don't have a mortgage you could have just stopped paying the maintenance fees. I did this last year at my Diamond Resort in Pigeon Forge, TN. They sent me a couple of threatening certified letters and nothing thereafter. I never answer the phone if the person is not on my contacts. Last December they sent a deed for me to sign it back to them and no cost to me. I called their bluff and they blinked. They also stated this would relieve me of any past/present/future financial obligations to the HOA. I saved the $1000 to do it their way plus $800 maintenance fee for 2022. I think so many people stopped paying that they had to stop the financial bleeding. They get the unit back to resell for $$$$.

 

[davidvel]

This "Recital" is utter garbage. "___. has negotiated with the above mentioned timeshare and you are hereby entering into the release of your Timeshare(s) Interest." ?<#?$#?% They negotiated with TS? Doubt it. "You" are entering into a release of your timeshare interest? But the TS is NOT releasing you??? What the heck did they "negotiate"?

"Lifetime protection policy"??? Such flimsy language. Do they sign the Recital?

 

[lworks86]

If you don't have a mortgage you could have just stopped paying the maintenance fees. I did this last year at my Diamond Resort in Pigeon Forge, TN. They sent me a couple of threatening certified letters and nothing thereafter. I never answer the phone if the person is not on my contacts. Last December they sent a deed for me to sign it back to them and no cost to me. I called their bluff and they blinked. They also stated this would relieve me of any past/present/future financial obligations to the HOA. I saved the $1000 to do it their way plus $800 maintenance fee for 2022. I think so many people stopped paying that they had to stop the financial bleeding. They get the unit back to resell for $$$$.

Unfortunately I have 5 contracts, the last one does have a mortgage. Not sure exactly what the Diamond offer is because my contract with exit company expressly says "
Clients may not disclose ANY information surrounding their case with the developer
online, on any social media account, or in an online review of exit company name"

 

[Kozman]

Unfortunately I have 5 contracts, the last one does have a mortgage. Not sure exactly what the Diamond offer is because my contract with exit company expressly says "
Clients may not disclose ANY information surrounding their case with the developer
online, on any social media account, or in an online review of exit company name"

Ouch! Your case is much more complicated by the fact you are already engaged with an exit company. That rules out Transitions through Diamond. Plus you are already in the hole with the exit company. You might wish to consult an attorney at this point.

 

[TUGBrian]

unfortunately you are being fed a complete line of bularkey in an effort to scam you for even more money.

 

[RX8]

@lworks86 If all this exit company did was to send your contract to foreclosure by advising you to stop paying I would file a complaint with the state Attorney General’s office and the BBB. If they had an attorney advise you to just stop paying I would also file a complaint with the bar association.

If this is TS Solutions, I would recommend when filling the BBB complaint that you ask for a refund. They are BBB accredited and may not want to jeopardize that standing.

This is no different than if you were trying to get out of your 2000 Ford Focus that you owe $29,000. You answer an ad from the “Be Free from your Auto” company who charges you $7,000 upfront, tells you don’t talk to your bank and to stop your payments. The bank comes to your house at 4:30 am and tows your car as a repossession. What did this company do to earn $7,000? Nothing. They also won’t refund your money because in their twisted view you are technically free from your auto.

 

[lworks86]

Ouch! Your case is much more complicated by the fact you are already engaged with an exit company. That rules out Transitions through Diamond. Plus you are already in the hole with the exit company. You might wish to consult an attorney at this point.

recommendations? I thought I researched well enough before I engaged with the exit company. I didn't realize that the 'good' reviews by a number of websites were also fraudulent. I am told that companies can buy good reviews. I thought I found a group that could/would help with scam exit companies only to find out on this site and other that they also had many complaints.

 

[TheTimeTraveler]

recommendations? I thought I researched well enough before I engaged with the exit company. I didn't realize that the 'good' reviews by a number of websites were also fraudulent. I am told that companies can buy good reviews. I thought I found a group that could/would help with scam exit companies only to find out on this site and other that they also had many complaints.

ANY exit company that charges you an upfront fee is a scam.

Why? Once they are paid they have absolutely NO INCENTIVE to do anything for you. They take the money and move on to the next victim (and sometimes they keep scamming the existing victims with other money grabbing ideas).





.

 

[davidvel]

ANY exit company that charges you an upfront fee is a scam.

Why? Once they are paid they have absolutely NO INCENTIVE to do anything for you. They take the money and move on to the next victim (and sometimes they keep scamming the existing victims with other money grabbing ideas).





.

Put another way: If they did not get your $$ up front they would never get your $$, because there is no legitimate way to "get you out of" your agreement(s).

 

[lworks86]

I appreciate all the comments, thank you. When I asked follow-up questions RE mortgage recital, I was told some interesting things. I was told that because Diamond contracts are in perpetuity, if you stop paying maintenance fees on a contract that Diamond would calculate an amount due over 30 years less the time you paid, and add that to your default amount. So for discussion if the maintenance fee was $1000 per year and you paid 5 years, then they would add $25,000 to the default amount then report it to IRS. Yes, I know the fees won't stay at a consistent amount. IRS would charge taxes on 25% of that with a 1099-c. I know that amounts "forgiven" can be reported and you have to count some part as income, but I don't know the specifics. I was also told that because they were debt relief experts etc. , that they are able to protect your credit and somehow stop the 1099-c . So now I have questions:
1. Can Diamond charge you for future maintenance fees?
2. Since my contracts are for points, is there an actual deed? If they do "A deed-in-lieu of foreclosure", how will that affect my credit score.
3. Since Virginia is a non-judicial state , can they attach anything like my car, house, IRA etc?
4. Of the 5 contracts I have with Diamond, only the last one has a Diamond loan against it.
5. With their high pressure sales pitch and my stupidity, they convinced me to open their Hilton Amex card with zero interest for about 11k of the mortgage on the last contract. What happens if I stop paying that?
6. Has anyone filed a suite against an exit company for not "getting them out of a TS contract?

 

[lkc1234]

Until I finalize a few things, I rather not reveal the company names. When the dust settles and if they don't deliver, then both company names will absolutely be posted on every website I can find and every relevant BBB site.

They are scammers. No questions. You are just pouring money down a rabbits hole.

 

[lworks86]

I appreciate all the comments, thank you. When I asked follow-up questions RE mortgage recital, I was told some interesting things. I was told that because Diamond contracts are in perpetuity, if you stop paying maintenance fees on a contract that Diamond would calculate an amount due over 30 years less the time you paid, and add that to your default amount. So for discussion if the maintenance fee was $1000 per year and you paid 5 years, then they would add $25,000 to the default amount then report it to IRS. Yes, I know the fees won't stay at a consistent amount. IRS would charge taxes on 25% of that with a 1099-c. I know that amounts "forgiven" can be reported and you have to count some part as income, but I don't know the specifics. I was also told that because they were debt relief experts etc. , that they are able to protect your credit and somehow stop the 1099-c . So now I have questions:
1. Can Diamond charge you for future maintenance fees?
2. Since my contracts are for points, is there an actual deed? If they do "A deed-in-lieu of foreclosure", how will that affect my credit score.
3. Since Virginia is a non-judicial state , can they attach anything like my car, house, IRA etc?
4. Of the 5 contracts I have with Diamond, only the last one has a Diamond loan against it.
5. With their high pressure sales pitch and my stupidity, they convinced me to open their Hilton Amex card with zero interest for about 11k of the mortgage on the last contract. What happens if I stop paying that?
6. Has anyone filed a suite against an exit company for not "getting them out of a TS contract?

I just searched through my contract and specifically says "
Your membership is a perpetual "right-to-use" timeshare interest and does not
expire. You will not receive a deed to real property. " So what is the likely consequence of defaulting on the MF and loan?

 

[sponger76]

I just searched through my contract and specifically says "
Your membership is a perpetual "right-to-use" timeshare interest and does not
expire. You will not receive a deed to real property. " So what is the likely consequence of defaulting on the MF and loan?

With the loan, that's a definite credit score hit. No lawyer or timeshare exit company can shield you from that.

With their high pressure sales pitch and my stupidity, they convinced me to open their Hilton Amex card with zero interest for about 11k of the mortgage on the last contract. What happens if I stop paying that?

That would be between you and AMEX, not Hilton or HGVC, and would also result in a credit score hit.

 

[dioxide45]

I appreciate all the comments, thank you. When I asked follow-up questions RE mortgage recital, I was told some interesting things. I was told that because Diamond contracts are in perpetuity, if you stop paying maintenance fees on a contract that Diamond would calculate an amount due over 30 years less the time you paid, and add that to your default amount. So for discussion if the maintenance fee was $1000 per year and you paid 5 years, then they would add $25,000 to the default amount then report it to IRS. Yes, I know the fees won't stay at a consistent amount. IRS would charge taxes on 25% of that with a 1099-c. I know that amounts "forgiven" can be reported and you have to count some part as income, but I don't know the specifics. I was also told that because they were debt relief experts etc. , that they are able to protect your credit and somehow stop the 1099-c . So now I have questions:
1. Can Diamond charge you for future maintenance fees?
2. Since my contracts are for points, is there an actual deed? If they do "A deed-in-lieu of foreclosure", how will that affect my credit score.
3. Since Virginia is a non-judicial state , can they attach anything like my car, house, IRA etc?
4. Of the 5 contracts I have with Diamond, only the last one has a Diamond loan against it.
5. With their high pressure sales pitch and my stupidity, they convinced me to open their Hilton Amex card with zero interest for about 11k of the mortgage on the last contract. What happens if I stop paying that?
6. Has anyone filed a suite against an exit company for not "getting them out of a TS contract?

I simply don't see how they can add 30 years of fees to the default amount. If so, a home lender could also add the interest. Who told you this? The exit company? No, Diamond can not add future maintenance fees and can not include these in with the 1099-C. Chances are very likely that they just wright off the deficiency. They won't sue, they won't try and go after you to garnish wages. They won't attach liens to other property. From what I have seen reported here, you will get a 1099-C for any debt that is written off.

 

[Kozman]

I simply don't see how they can add 30 years of fees to the default amount. If so, a home lender could also add the interest. Who told you this? The exit company? No, Diamond can not add future maintenance fees and can not include these in with the 1099-C. Chances are very likely that they just wright off the deficiency. They won't sue, they won't try and go after you to garnish wages. They won't attach liens to other property. From what I have seen reported here, you will get a 1099-C for any debt that is written off.

A 1099-C can then be disputed by showing timeshares have little to no value using examples of sold timeshares on E-bay for $1. Something to check into if it happens.

 

[SmithOp]

A 1099-C can then be disputed by showing timeshares have little to no value using examples of sold timeshares on E-bay for $1. Something to check into if it happens.

Maybe, but it's not mortgage debt on a timeshare at this point, it was debt put on a credit card to pay off the timeshare points that were purchased. I can only imagine the interest rate once the 0% teaser rate expires. I'm not sure how to go about disputing a 1099 with IRS, it can't be that simple.

The statement about IRS charging 25% tax is wrong, COD is reported as income, so it's taxed at whatever bracket you are in. It could be as low as 10%, the first bracket.

 

[dioxide45]

A 1099-C can then be disputed by showing timeshares have little to no value using examples of sold timeshares on E-bay for $1. Something to check into if it happens.

I agree and I did talk to an attorney one time who said a 1099-C should be disputed if it came from cancellation of timeshare debt. Though the attorney didn't really have any experience doing that so no idea if it would work. Timeshare mortgage are more like seller financing. There isn't some bank behind the scenes funding your loan like there is on a traditional real estate mortgage. There are no wire transfers. The timeshare company may later sell those notes to capitalize the notes, but when you buy a timeshare with financing, the timeshare company isn't getting a big pile of cash from someone. They are simply getting the monthly payments. Also akin to buy here pay here.