Timeshare Developers Owe Alan Grayson a big Thank You..

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Shielding Time-Share Sellers - Barrons.com


I'm not sure what I think about this.. Almost wish the exemption would not have been given. It would have made an interesting wrinkle having developer sales be forced to determine if a buyer actually could afford to buy.

[dougp26364 Senior Member Find all posts View Profile Close dougp26364]

One would think it common sense to have some standard for qualification to buy a timeshare. When a developer sells timeshares to people who can't afford them, the HOA/BOD and other owners pay the price when they default on their MF's as well as their loan. Let's face it, if they can't pay their loan, they won't be able to pay MF's either. Making TS developers exempt from properly qualifying loan prospects is just a stupid idea IMHO.

[catahoula Member Find all posts View Profile Close catahoula]

These day's it is very easy to check a credit score. Some standard should be set. If you purchase a car and don't make payments, the repo man will come after you. Obviously there is no repo man for timeshares because there is no value.
When Grayson lost the election nobody was happier than me except for Bill Oreilly.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Don't forget.. From the developers viewpoint- the ability to pay has had nothing whatsoever to do with their business model..

They simply wanted to secure a promise to pay.. Someone willing to sign a contract and a note.. They then bundled those notes and sold them. Passing the hot potato around the finance community, each person willing to hold it for a time would take another slice from the pie (With the margins so high there were always plenty of slices to go around).. In the past when sales were fast and heavy, developers would simply replace defaulting loans with new buyers- simply trying to juggle the risk. As sales slowed, we've seen a number of developers who have not been able to keep enough balls in the air and have been forced to declare bankruptcy.

Only when the credit markets tightened and the rate of new sales slowed did this model started to look so flawed! As the economy improves, it is likely that the big developers will simply try to return to the status quo.. This exemption helps to make that possible.. For an industry struggling right now to survive, that possibility may be enough to keep a few in the game a little longer.

I ultimately hope that the slowdown will force some real change in the industry. I'm never a fan of change by legislation, however- as politics has a way of screwing everything up even worse.. Change has to happen because of free market forces to truly be influential.

We are now seeing a few companies flirting with the idea that the quality of the notes they sell is important.. Not many, but a few.. Hopefully, these companies will be rewarded for their uncommon sense- and then others will also follow suit.

I think that the vast majority of developers do not believe in the concept of timesharing. This is the reason developer thinking has always been so short-term in outlook. Develop a property, pump dollars into marketing, cash out the notes, and then run to the next one.. Very little thought has ever been spent on trying to create property regimes that have a long term viability. That has always been a concern only of the associations, who are left trying to assemble the pieces after the developer cashed in and moved on..

Notice-- I did not say that associations or timeshare owners should be grateful..... Just developers.