Will Timeshare Foreclosure Affect Me – When you buy a house, apartment, or other property, you usually don’t have enough in your pocket to complete the purchase. The financial services industry has responded to this common problem with one of its most popular products: the mortgage. (Some states have a similar type of document called a deed of trust.)
A timeshare is not actually the same type of real estate interest as a house or condo. But they are still expensive, and many people need a mortgage to pay for them. However, most banks are unwilling to lend you money to purchase a timeshare. Lenders are aware of the problems that arise with timeshares and often consider them too risky to lend.
Resort developers come in and provide their own financing in the form of mortgages and deeds of trust for the units they sell to timeshare owners. This may seem like a great service, but it really isn’t. What it does is give the resort another tool to control your behavior and force you to pay high interest rates and ever-increasing resort fees.
If you fail to pay your mortgage or fees to the company holding the mortgage, that company can seize your interest in the property. Unfortunately, this causes much more damage than simply repossessing your property. In this article, we’ll take a look at the foreclosure process, what it means for you, and why letting your timeshare company foreclose is a bad idea.
The foreclosure process is governed by the laws of the state where your property is located. Therefore, if your timeshare is located in Las Vegas, Nevada law will apply. If the home is located on Oahu, you will need to consider Hawaii’s foreclosure laws. If your timeshare is located in a foreign country (such as Mexico), you should be familiar with the laws of that country.
In the United States, foreclosure is the legal process by which the mortgager (in this case, the resort) reclaims the real estate interests that secured your timeshare loan. Simply put, this means that if they cannot convince you to repay the loan, they will legally take your timeshare assets for you.
Some states require you to go to court to do this, but many allow non-judicial seizures. In a non-judicial foreclosure, the resort must generally send you a notice of default specifying the amount you, the property, and the loan owed are in default.
Most laws also require that this notice be posted in public records where your timeshare property is located. This makes resale much less likely than usual because no one wants to buy a property that a lender is foreclosing on. Even if you somehow manage to get a buyer, the resale value of the property will be virtually zero.
If you fail to make your mortgage payments after receiving a notice of default, the company will set up a foreclosure sale as required by state law and send you a notice of the sale. You can still save your wealth afterwards, but your time to do so is very limited.
This sale, open to the public, will be an auction where the highest bidder takes your property, even if that amount is less than what you owe on your mortgage. Often times, the company that obtained the mortgage (the resort in this case) will “make a credit offer” for the amount you owe on the mortgage and take the property outright.
It’s no secret that most timeshare owners are unhappy with their purchase. With ever-increasing maintenance costs, special assessments, and restrictive rules about when you can take a vacation, timeshares often become unrewarding financial pits for many people. Then you get a repossession notice and think, “Maybe it wouldn’t be a bad idea to get rid of this!” “What could hurt?”
Unfortunately, it can hurt a lot. The foreclosure process doesn’t end once the sale goes through, especially if the mortgage company doesn’t get back all the money it loaned you. This unpaid money can cause a lot of legal and financial problems.
If you become subject to foreclosure, you lose more than just your property. Remember, the purpose of a repossession is to recover as much money as possible from the company that loaned you the money. If the company doesn’t get it, they can legally pursue you until it’s paid in full.
Let’s look at a very common example of extrajudicial seizure. Let’s say a company repossesses a timeshare it owns in Las Vegas, Nevada. To buy the house, I borrowed $30,000. At the time of repossession, you have paid off $5,000 of the loan principal, meaning you still owe $25,000 on the loan.
The company obtained the property through a credit offer, but the appraisal determined it was worth only $2,000 on the day of the sale. The timeshare company can now sue you for a deficiency judgment to get the last $23,000 from you. This will be an actual court case and your costs will include attorney’s fees. You may end up paying court costs against the company.
Not all states allow a defect to be identified. However, if the timeshare company ends up receiving a deficiency judgment, it can take your money. If you don’t have the money, they may place a lien on your other property (such as your home or property owned by a company) or garnish your wages to get their money back.
And if a flawed judgment wasn’t bad enough, you should also keep in mind that repossessing your timeshare will destroy your credit. This can cause your credit score to drop, which can take years to recover from.
If your credit history is damaged, it may also affect other loans you apply for. Applying for a credit card can be difficult. Any credit you may get will almost certainly have a much higher interest rate. If a potential employer collects your credit report, it may also affect whether or not you get a job in the future.
At this point, you may think you only have two options. Either continue to pay expensive timeshare fees you don’t want or create huge legal and financial problems resulting from a timeshare foreclosure. But don’t despair! There are other options too.
The Centerstone Group has 30 years of experience dealing with chronic problems in the timeshare industry. They have a toolkit full of exclusive ways to legally and ethically exit your timeshare agreement.
You may need a pressure campaign on your timeshare resort to convince them to let you move out of your unit. Alternatively, if foreclosure is possible, The Centerstone Group can connect you with an experienced law firm or help you negotiate a deed in lieu of foreclosure (i.e. convince the resort to accept your deed to the property).
Centerstone Group is a BBB accredited company with countless reviews that prove they can deliver results. Whether you’re a new timeshare owner regretting a recent purchase or a long-term owner tired of the costs and hassles, give The Centerstone Group the opportunity to help you solve your problems.
Foreclosing on a timeshare is a stressful, expensive and messy way to get out of a timeshare you no longer want. Although it is technically possible to remove people from the ward, doing so raises so many legal and financial problems that it is often a wasteful and destructive solution, similar to treating a disease by killing the patient.
Using a timeshare exit company can help you avoid many of these difficulties, but not all timeshare exit companies are created equal. Be wary of companies that encourage you to stop paying fees. You will then go through the foreclosure process. The Centerstone Group is committed to helping you find legal and ethical exit options. Contact us today for a free consultation and case evaluation. Old programs | Beware of Timeshare Exit Scams | How to Sell a Timeshare | Timeshare rental | Transfer of timeshare deed | Contracts, payments and credit
The short answer is yes.” When you take out a mortgage to purchase a timeshare, you enter into an agreement to make monthly payments on the timeshare until the debt is paid in full (usually over 10 or 15 years). As with any other mortgage payment, It is very important to stick to your timeshare’s schedule and stay on top of your timeshare mortgage payments and appraisals.Simply put, if you stop making payments on your timeshare loan, your timeshare will eventually be subject to foreclosure because it is considered real property; Just like where you live. Interest in real estate.) Additionally, if you have paid off your timeshare loan but have stopped paying maintenance and other related costs for any reason, you may also face foreclosure on your home.
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