Paid-in-full Timeshare Foreclosed on Without Notice!

[LesTyler Junior Member Find all posts View Profile Close LesTyler]

Oh boy did we get screwed today, folks!

Yes, our Paid-In-Full $8000 timeshare was foreclosed on two weeks ago unbeknownst to us until today when we tried to book a trip. We bought it for cash from Sunterra in July 2006. And even worse, we've been told that this will now go on our credit report as a foreclosure even though it was paid in full!!!!!!

We purchased a timeshare (formerly "Sunterra" - now "Diamond Resorts") in cash for approx. $8000 in July 2006. 2006 and 2007 maintenance fees were included in the purchase price per our contract agreement. We paid our 2008 maintenance fees of approx. $450.

We moved mid-2008 and did not receive the notice to pay 2009 maintenance fees. We had our mail forwarded through the post office yet didn't receive any subsequent notices from Diamond Resorts. We would have paid it immediately had we realized it was due.

Although the timeshare company has two phone numbers plus our email (in addition to the old address), we were never contacted that our maintenance fees (approx. $700) were past due and were never contacted by phone/email for payment. I agree that it was our fault for not realizing the maintenance fee was due, by why not simply give us a call to collect on the fees? Any other creditor would have done so.

The timeshare was subsequently foreclosed on May 28th this year and the only reason we found out was because we went online to try to book a vacation. We feel this is a big scam to steal our money and that the company did not do due dilligence to contact us for payment - of course it is in their best interest to foreclose on the account which was paid in full at the time of purchase rather than to actually make an attempt to collect the maintenance fees.

We are absolutely sick over losing our $8000 but worse, the possiblity of a foreclosure on our credit record, especially when it was paid in full!

Can anyone please, please, please offer advice on how we could possibly reinstate the account by paying the maintenance fee? I would appreciate anyone's feedback.

Les

[philsfan Administrator Find all posts View Profile Close philsfan]

This thread may help some. It's in the DRI forum.

[Spence Super Moderator Find all posts View Profile Close Spence]

While they'll tell you it was your responsibility whether they billed you or not, send your story to these two dudes at DRI. Good luck!
Patrick Duffy Chief Experience Officer
Jeff Shelton Executive Resolutions

[Beaglemom3 Senior Member Find all posts View Profile Close Beaglemom3]

Notify your state's Attorney General. Have all documentation ready.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Your foreclosure was for a m/f, which has nothing to do with whether the week was paid in full or not. I would bet, though, that if money were owed on the purchase price they would have made a far more diligent effort to communicate with you.

The foreclosure process does require notice to the defendant of the foreclosure proceeding. I would try to find out what the court file says about how notice was served upon you.

There is something else I would also look for in the court file. I am not familiar with how DRI does foreclosure bids but I am familiar with what I have seen some other developers do. Instead of bidding just the amount owed, as an HOA usually does, they bid a price more in line with what they sell weeks for. I guess this is for appearances sake, but it creates a big legal risk for them. The foreclosure attorney, of course, is their man, so he never collects this money. He just issues as commissioner's deed to the developer and recites the bid price. Legally, however, the developer is required to pay the full amount, and any excess over the amount owed on m/f's is required to be paid to the owner who was foreclosed upon. The theory seems to be that an owner who has never bothered to respond to the notice of foreclosure is probably never going to look up how much the bid was and find out that legally they were entitled to some money back. This is a common but risky (to them) developer game, but I do not know whether DRI is one of the ones which plays it. It is worth finding out, as if they do, it may be an avenue to get your money back or at least leverage to get your week back.

[Spence Super Moderator Find all posts View Profile Close Spence]

We don't have all the info, in 2006 this person may well have bought points where they own membership in a Trust and not a deed. Therefore, the "foreclosure" may not have been a foreclosure in the sense Carolinian is talking about. This is one of the many "beauties" of this business model (for the developer.)

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

I agree with Spence.. Most likely this was a non-deeded membership that was simply "cancelled" due to non-payment of the maint. fees. If this was a full blown foreclosure- the developer would have made repeated attempts to contact, if for no other reason than to not incur the legal costs of the foreclosure process.

Good news is that the account can be reinstated by Diamond, but you'll have to push the right buttons. Spence has probably already gotten you on that track with the contacts he provided. Also, since this was most likely not a true foreclosure process- Diamond can also ammend your credit report to show simply a late payment once this has been resolved.

You'll need to take a deep breath, try to be as calm as possible, and understand that while it will be very easy to point fingers and place blame on the developer for this- some of the problem rests with your failure to remember your payment obligation. Similar to a homeowner who doesn't pay his electric bill because the bill didn't arrive in the mail- common sense tells you to call and arrange for the payment!

Go into your conversations with Spence's contacts with the mindset of shared responsibility for the problem- and ask for their help. Don't demand they fix "their" mistake.... "A spoonful of sugar" and all that!

Good luck.. I'm truly hopeful this will be resolved to your satisfaction.. Please share what happens..


Rich

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

You might be surprised at how little was done in the t/s foreclose process to give notice. The foreclosure attorney often assumes, usually correctly, that management has already made all efforts possible to get the person to pay and they are just not interested or dont care, so they do the minimal necessary under the law, and sometimes use procedures that may be overturned if done quickly enough. In North Carolina, foreclosure notices can be posted on the door of the property by the Sheriff. This is the quickest and cheapest form of service of process (i.e. notice) availible and some t/s foreclosure attorneys simply pay the local sheriff to post the Notice of Foreclosure on the door of the timeshare unit. Since nothing says how long it has to stay posted, the resort staff usually comes by soon afterward and removes it. The sheriff files a return of service with the court saying he has duly served the notice by posting it on the door of the property.

Now, if this is indeed RTU points with no deed, it is quite correct that foreclosure in not necessary and you can easily be hosed by the developer with a simple cancellation with no notice. That is one of many reasons why this type of ownership should be avoided like the plague.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Please keep us apprised of the resolution. This situation stinks. Any reasonable developer would reinstate your account.

[LesTyler Junior Member Find all posts View Profile Close LesTyler]

Thank you for your great advice

Thank you to all who responded to my plea for help! You have been a great resource and I really appreciate it.

I have sent emails to both Patrick Duffy and Jeff Shelton (thank you Spence!) - I will keep you updated as to the outcome.

Great question about whether the points were membership in a trust or deeded - I will have to look into this more but I'm thought we recieved an actual deed for the Ridge on Sedona (AZ) which is where we went to the presentation. I will do more research and let you know.

As as aside, does anyone know if it's possible for a property to issue points as both deeds and memberships in trusts? The reason I ask is that I can see on county records that other purchasers from the same home resort within the same timeframe were actually given a deed, but I'm wondering if we simply received a membership in a trust...

Having said this, I can't find anything in the county records that show:

1) an actual recording of title/deed associated with our name (althought I see many others recorded by Sunterra during this timeframe - but again, it's possible for someone to purchase points as a deed and points in a trust for the same location, right? Or am I off base on this one?). Also, I've been looking in the county records of where the home resort is but should I be looking in Clark county where DRI's head office is? Is there anywhere else I should look?

2) an actual recording of the lien (don't they have to record liens?)

And I can't find anything in the court records that show a foreclosure proceeding, which would coincide with the fact that we were never served a foreclosure proceeding. Although the representatives we spoke to on the phone said that it had been foreclosed on, perhaps simply the wrong terminology was used and maybe this was a membership in a trust and not deeded afterall ...

And you're absolutely right - it was definitely our responsibility to know about and pay our membership fees and we fell short in living up to this responsibility. This has been a great lesson (albeit a difficult one), and as a result we've begun putting together a plan to keep a closer eye on things.

Thank you again for all your great feedback and comments - I am truly appreciative of your help and I will keep you updated on what happens. (Keep your fingers crossed!)

Les

[Spence Super Moderator Find all posts View Profile Close Spence]

My memory is subject to EOA, but in the 2006 time frame there could have been both deeds and Trust memberships sold, either one representing a certain number of points. If you had a deed it would have been recorded in the county where Sedona is located if it was a Sedona deed. If you paid in full, you should have that deed somewhere. I like your attitude, if you carry that through with the DRI people, as BB said, any reasonable developer would let you pay the back MFs and interest and if they were sticklers, the late fees.

[Westinx2 Junior Member Find all posts View Profile Close Westinx2]

I just found out today that our Paid-in-Full timeshare was foreclosed as well

We have two Westin timeshares. We have been late to the game (so to speak this year) and have not been able to find an available week, close to us, these past few months. So today I called to transfer both my weeks to Interval (which has to be done by 12/31/10). They found my first timeshare without any issues and transfered it. But then when they tried to look up our second timeshare they had difficulty and kept putting me on hold. Then I was transfered all over the place. Then I was told that someone would have to call me back.
After 30 minutes I never received a call back so I contacted the Westin again. I was told that I no longer own it for lack of paying maintenance fees. This timeshare was paid in full years ago. My response was that I had no idea that we were in jeopardy of losing our timeshare and I wanted to know when they contacted me about the foreclosure. The said that according to their notes that I spoke to them on November 1st. I still had no idea what they were talking about and I asked the person to read the notes to me. As the gal was reading through the notes she stated that I provided my cellphone number as a call back number and she proceeded to give me that cellphone number within their notes. It was not my cellphone number. It was not even in the same area code as mine.
I continued to feel completely confused , less than 30 days ago I was calling into Westin to find a week available for this particular timeshare. At that time no one disclosed to me that it was in the process of foreclosure. Furthermore they confirmed that it was available for use. Wouldn't you think that if monies were owed on it that it wouldn't be available for use.
Of course the person that I really needed to speak with was not in today. And I am unavailable beginning tomorrow through the New Year.
After spending a good portion of my morning on the phone with them, I started to go through my records because I thought I had paid the maintenance fees (albeit late). Sure enough, I did pay the fees on this timeshare months ago. I spend the rest of the day going through my records to see if they ever sent me any correspondence regarding a foreclosure.
How can ones' property be resold without proof to the court that (a) it hasn't been paid (b) the owner has been rightfully contacted?
Looks like I might have to contact an attorney to file a claim against them. I am just flabbergasted. Any suggestions or advice?

Thanks!

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

Sorry this has happened to you. Do you have canceled check or credit card transaction record to prove that you have paid 2010 M/F? Which resort is it?

[Westinx2 Junior Member Find all posts View Profile Close Westinx2]

Thanks, Lisa -

I checked my statement yesterday and under 'Description' it specifically says 'Cancun Langunamar.'

I finally got ahold of the person in charge at Westin today and they see my payment. They also claim that they sent me correspondence (I went through ever file and piece of paper in my office yesterday and did not find anything about this from the Westin). He was further surprised to hear that I was trying to book this week about 30 days ago and that no one said anything to me at that time.

So now they are owning up to the big oops and he is opening a full investigation.

The one thing that they may try to use against me is the amount I paid verses what was owed. There is about a $300 difference. When I called in to make the payment I asked if they could waive any of the delinquency fees if I paid it off at that moment. And the amount I paid was what the representative said they would accept. Now that is my word against theirs.

This is a fight that I am willing and able to embark upon. However, the thing that still surprises me is that a timeshare can be foreclosed upon and sold to another party without any official notice to the current owner. That to me just seems wrong. Can anyone explain why this is so?

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

Thanks for the reminder

Thanks for the reminder about the importance of timely payment of MFs. I am a Wyndham points owner and my MFs are billed monthly. But I have been bad about paying them in 2010. This thread jogged my mind to the fact that I am behind in my payments and what if they are in the process of foreclosing on my without notice?

So I called Financial Services today to find out how much I still owe and make a payment by phone and the guy said something that sounded like "deed in lieu of forclosure"? That got my attention! I said, no, I am not.

After a few minutes he said I had to talk to another department. When I finally got transferred, it was to "collections".

I had gotten no notices from Wyndham that my account had gone to collections!

Anyway, I got my MFs paid in full in time to deposit my points with RCI and pool my 2011 points. And I set up my 2011 MFs to be automatically debited monthly.

So, thanks for the timely reminder about the importance of keeping up with the MFs!