Profile picture for ssshingles

Foreclosure of Timeshare

Does a Foreclosure of a Time share hurt your credit score just as much as a Home Foreclosure?
  • March 04 2011 - Jacksonville
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Answers (11)

Profile picture for AvaButtler
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  • January 31
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  • January 14 2014
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If your timeshare loan is indeed a mortgage, then yes, it will affect your score several hundred points just like a foreclosure on a home. Some timeshare loans actually have a deed and some do not, it depends on the specific contract and product. I have seen both, but regardless, don't default on that loan if you can help it as an underwriter will count a timeshare foreclosure just like a regular foreclosure and you will be subject to the 2, 3, 4, or 7 year waiting period to get a new home loan.  I have an applicant right now that is going through this exact scenario and let me tell you, it is a nightmare. Do anything you can to keep paying on that account on time.
  • December 04 2013
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Before buying a timeshare, calculate the total cost of the timeshare, including  mortgage payments* (hotlink deleted by Zillow moderator) and expenses, like travel costs, annual maintenance fees and taxes, closing costs, broker commissions, and finance charges. Then compare these costs with the cost of renting similar accommodations with similar amenities in the same location for the same time period. And remember, a timeshare is not an investment for profit or an interest in real estate that will likely appreciate over time. And if you try to resell your timeshare, it is unlikely you will get any way near what you paid for it
  • December 04 2013
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Timeshares have deeds. I have one I purchased 20 or so years ago. It's the same as purchasing a home outright, only your are purchasing a week/s at a specific address. It doesn't matter that you can use various resorts, etc.. You will still have a particular week and address recorded to you.
  • March 17 2011
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This is all news to me. Every credit report I've seen when the borrower had one or several timeshare loans none where recorded as mortgages.

Happy funding, Rudi
  • March 17 2011
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Interesting post.  I have clients who have bought into a timeshare (Diamond Resorts) and it was being reported as a mortgage on their credit report.  They had a 30 day late being reported in error which was threatening to hold up our close since this was viewed as a traditional mortgage late.   Fortunately since the late was an error we were able to resolve the issue. 
  • March 16 2011
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Profile picture for Pretty Flower

Don't quote me on this, however, some timeshare loans are considered mortgages. This would depend on what kind of product is purchased. Some timeshares that are definitely not mortgages are: vacation clubs, trust collections, or right to use. I have been in the timesharing industry for well over a decade now and we can "foreclose" on some forms of ownerships (fractionals, deeds, etc.). Before foreclosing, you may want to ask the developer to allow a mutual release agreement (voluntary repossession). If the note has been sold to an outside lender, this may not be an option. Talk with the finance department of the company. Many times they will work with you on catching up back payments or deferring them. They dont want to have to be responsible for the maintenance costs.

  • March 15 2011
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I understand your confusion Rudi. Time shares are a completely different animal. Even though there is no "mortgage" associated with a time share, I think it is still called a foreclosure because if you dont make the payments, you are giving up your share of the ownership rights of the property? Maybe? It may depend on the type of time share you get involved with too. Some time shares are just for one property and some are more like vacation clubs where you can go to several different destinations and are not limited to one location. Long story short ssshingles, Weather its called a foreclosure or a reposession... Its going to impact your credit score substantially.

  • March 07 2011
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I think it could be worse.

That link was interesting Brian. I don't know why they call it a foreclosure. Mortgages are not available on timeshares. A timeshare is purchased by the length of time you wish to allocate usage per year. They are either financed by the developer or by a personal loan. I think it would  be considered repossessed, not foreclosed, if the loan went into serious default.

Happy funding, Rudi
  • March 04 2011
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  • March 04 2011
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