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Anatomy of a Timeshare Foreclosure

Inside Timeshare today publishes another article by Irene Parker our US writer, she today highlights the plight of a Filipino family who have had a bad experience with pressure sales tactics. It is not an uncommon story, we have seen this all too often, the falsehoods told by some sales agents just to secure a sale, “you need to buy more points or lose what you have”.

This particular story is being translated into Tagalog, the Philippine language to be submitted for publication in the Philippines, also for publication in the Californian Filipino Press. We are also waiting for a contributor from Australia to submit his comments on timeshare “down under” to Irene, this is taking Inside Timeshare onto a worldwide stage.

As one of our regular US readers told Irene, Inside Timeshare is probably the first international timeshare publication that he has ever known. We know from some of the emails received, we are read all over the world, the news and views we publish are relevant and of interest to all timeshare owners, wherever they are.

According to certain sources, DRI think that Inside Timeshare is not being fair on them, oh dear! Does that mean we are doing it right?

What we at Inside Timeshare have called for in past articles is dialogue, recognition of that facts that the product has been sold aggressively, that certain groups especially the elderly have been targeted with these tactics and to change the way the product is sold.

For timeshare to become the product it was at first envisioned to be, resorts and developers need to change how they perceive the owners / members. They are not “cash cows” to be milked at every opportunity, but the cornerstone of the business. Without them there is no business.

So now on with today’s article, we hope it helps you the reader to understand what is going on.

Anatomy of a Timeshare Foreclosure

Part I: The 3Rs or F of Timeshare

The 3 R’s of Timeshare: Part 1

Part II: The 3Rs of Timeshare

Part II: The Three Rs of Timeshare

Part III next week: Two more Rs – Rentals and Resale

By a Diamond Resorts Filipino owner and Irene Parker

Betty and Rolf Burmeister

Two Diamond Resort members share their story

April 12, 2017

debt

 William, age 70, and his wife Mary, age 71, are a Filipino couple and residents of California. The family has asked not to be identified. William said the family has maintained a good credit score until now and are horrified that at age 70 they must face foreclosure. Mary was working just to pay for their loan and annual maintenance fees, but can no longer work due to complications from diabetes. They are worried about the lien Diamond will place on their assets and the burden they will be leaving their children.  

Mary worked as a hand therapist and William worked as a physical therapist. Nurses are the #1 export out of the Philippines, according to William. William and Mary are especially angry because, like so many Diamond Monarch owners alleging deception, they feel they were forced to buy points or lose Monarch “equity”.

The family owns 60,000 Diamond points. Historically, according to information culled from lawsuits, points have sold for $2 to $4 so we can estimate at least $180,000 spent on a vacation plan over time.

Diamond Resort’s non-deeded vacation points cannot be listed with any of the 64 members of the Licensed Timeshare Resale Broker Association, so families find themselves forced to foreclose if they are not eligible for a voluntary surrender due to a loan outstanding. Diamond Resorts is the only major timeshare that cannot be listed with an LTRBA member due to restrictions the members feel are more onerous than other timeshare companies.

http://www.licensedtimeshareresalebrokers.org/

William and Mary’s complaint is similar to this complaint posted on Trip Advisor from the same Diamond Cancun Resort in Las Vegas. We have heard from five other families with similar complaints from Diamond’s Las Vegas Resorts. This was the first complaint reported:

I am at the Cancun resort in Las Vegas and went to a breakfast where they said they would simply update me about the changeover to Diamond. I was told that I should have been invited to a dinner where I would have been given options, decided by a judge in a legal ruling against Monarch due to their bankruptcy. They proceeded to show me a print out that said when my current term expires in August. I would have to pay $573 per quarter to Monarch. They said that due to the bankruptcy, I would have no equity. That was option one. Pay more, have nothing. The other option they said was to transfer into Diamond at a cost of $12,000 plus and pay a yearly maintenance fee of $1,700. Less than the $2,292 I would soon be giving Monarch. They also told me that I would then have equity of $41,000 that I could sell. I was in tears. I do not have any extra money. In fact I have been looking for ways to get out of Monarch for over a year now. They said that was not an option and that as an owner, I was now proportionally responsible for their debt. I felt trapped and signed all the papers to transfer, with no idea how I can pay. After reading the comments above I am even more scared. I am trying to start my own business and am already in severe debt. They claimed when they ran my credit though that it looked better than most and assured me I qualified for financing. I would have to pay off, basically transfer to credit cards, which I can barely make my payments on now before I could look to sell. One of the reps assured me that she would put me in touch with someone who could help me sell my points. She even gave me her cell phone number to call after the sale/transfer is finalized. I am really scared though. Please help! We have to do something. It seems as though they have no qualms about lying to and robbing people for their own benefit.

William and Mary’s story in their own words:

  • William and Mary own 60,000 Diamond points
  • Mortgage balance:  $85,968.25 financed by Diamond at 13.1%
  • Monthly mortgage payment:  $1,375
  • 2017 Maintenance Assessment Fee – $9,034.05

filipino family

In Las Vegas at Diamond’s Cancun Resort in 2013, we were told we should have received an invitation to attend a dinner to discuss the transition of Monarch MGV to Diamond. The sales agent asked us to write a letter stating that we did not receive the dinner invitation and therefore should be given the same benefits and price per points similar to those who attended the dinner. He said he would fax our letter to another Diamond office in Las Vegas.

In hindsight:

  • I should have asked for a copy of the FAX transmission.
  • I succumbed to the fear factor. The agent stated that due to Monarch’s bankruptcy we will lose our EQUITY if we do not purchase additional Diamond vacation points.

The concierge stated that this meeting will be only for one hour. We were held in that meeting room for close to five hours. We eventually broke and signed a contract to buy more points.

We constantly get telephone calls inviting us to attend more updates and we generally turn them down. We had a telephone sales encounter one time from the same Diamond Las Vegas Cancun Resort office trying to sell us more points. This telephone encounter lasted for over three hours. It is very difficult to get away from them once you get sucked in.

Next, we made a fatal mistake by attending a “free” dinner meeting in Pomona, California July 2015. At that meeting, the sales pitch was, we need to completely get rid of our Monarch points by buying more Diamond points in order to prevent the increase in maintenance fees due to less and less people owning Monarch.

The example they gave was the hurricane in Cabo San Lucas that damaged the Cabo Azul property. The sales representative said that if we still own Monarch, we will be assessed increased maintenance fees to pay for the repair of the Cabo property.

Another example he gave was the water damage at The Point at Poipu, a Diamond acquired property in Hawaii. He said owners were charged for special assessment to repair the property.

http://www.tstoday.com/members/magazine/issue123/7-poipu%20point.pdf

Like the previous meetings, this meeting lasted for over five hours. We went home close to midnight. Your focus, decision making and judgement falters if you are kept that long. The increase in maintenance fees after this purchase started our financial struggles.

In 2016, we took out loans to pay our maintenance fees with credit cards. We are still paying for those at this time. We also use some points to pay for maintenance fees, although a point purchased for $4 to $5 is only worth $.10 if used to pay maintenance fees. We were allowed to pay in installments, but because we have not fully paid our fees, we were not eligible to book any vacation until we completed all payments.

Another sales technique that they used, and I feel so stupid for giving in, was opening new credit card accounts for our down payment.

http://insidetimeshare.com/call-change-us-timeshare-industry/#more-1397

In our case, a total of four credit card accounts were opened in our name with the “help” of the sales agent. We are still paying for these credit cards. I hope they will stop this practice and I am writing this article hoping to warn other victims.

We stopped paying our monthly mortgage December of 2016. We are now six months behind. Meanwhile we get regular phone calls averaging 2-3 times a week on our landline and mobile phone. I also get emails and written letters reminding me to pay.

Note from Irene: According to a KROLL bond report, Diamond employs 90 full time collectors via a dealer making 100,000 calls per week. Diamond has one of the longest foreclosure periods in the industry at 180 days, but they are not required to foreclose at that time point.

Diamond Resorts and Its Perpetual Mortgage Machine

Betty and Rolf Burmeister were also Monarch owners who upgraded and regret their decision.

“We upgraded at Diamond’s Riviera Beach Club in California ONLY because they said our heirs would not be liable for maintenance fees if we gave up our Monarch deed. Then, AFTER we converted we learned we have only 15,000 points instead of the 21,240 we owned prior to the conversion. This resulted in a maintenance fee increase from $1,785 in 2016, prior to the conversion, to $2,889 in 2017 after the conversion. Our original maintenance fee in 2007 was $1,044 so our maintenance fees have escalated dramatically. We would never have purchased had we known we would have less after we upgraded to Diamond points. We filed a complaint and even though the “hospitality” agent Michelle Gross agreed what we were told by the sales agent wasn’t true, our request for refund was denied (excerpt from letter).”

“Your heirs are not responsible for your membership should something happen to you.  If they choose to take over your membership in case of death as that has to be a choice made by your heirs and they must complete a transfer of ownership. The ownership will not automatically become one of your heirs due to either owners death.

Based on your account, the Purchase Agreement and a full review, we have not found any grounds to cancel this contract. You remain responsible for this purchaser as agreed to at the time of sale.”

We owned 354 VOP Monarch points. The conversion works like this:

  • 354 Monarch points x 60 = 21,240 Monarch points
  • After an upgrade we now own only 15,000 DRI points
  • We now own fewer points but more maintenance fees

fuming woman

Contact Inside Timeshare or one of our advocacy groups if you or someone you know needs help with a timeshare problem.

advocate 1

We seek to provide Diamond Resort members a way to proactively address membership concerns; to advocate for timeshare reform; to obtain greater disclosure from the company; to advocate for a viable secondary market; and to educate prospective buyers.

https://www.facebook.com/groups/DiamondResortsOwnersAdvocacy/

https://www.facebook.com/timeshareadvocategroup/

Of the 40,000 remaining Monarch owners, it has been reported 33% have not paid their 2016 dues.

Inside Timeshare would like to thank all those who contribute comments, views and their stories to these articles. It is you the reader who gives us the opportunity to write and inform others. If you have any comments or views you would like to share, no matter where in the world you are, Inside Timeshare would love to hear from you.

Charles and Irene would like to wish all our readers a very Happy Easter, have a great weekend and get the BBQ’s going!

easter


One Comments

  • Annabella Manglicmot

    May 6, 2017

    Dear Irene. Likewise we are also a victim of DRI agent misrepresentation from the very beginning we belong to MV in Palm Soring ,the reason my husband was very eager to buy this we are told by the agent that’s it’s a tax deductible and an investment and if we decided we dont like it she’ll buy it back. When I called her she never returned my call After four days I called to cancelled and I was told we can’t cancelled cuz all the paper work is done. I’m so frustrated and we were having problem in spending time with the time share especially the interval it’s a disaster.i tried to sell but the failed just took my $499.99 nothing happened so my husband was convinced to buy more pts. We were converted to MGV we can used it better I dropped the interval for no matter we do we can’t used it I feel I’m just wasting money even we were a gold member then in 2014my husband and I decided to go to Polo Tower what a big mistake s lady called telling we need to see her do she can explain how to use the time share better I didn’t want to but my husband insisted the 39 minutes takes more than 3 hrs. From the very beginning I told the lady agent I want to get rid/sell if I can , according to her we have to convert to DRI that’s the only way to sell because MGV filed for bankruptcy and they bought MGV . The best thing for us is ti convert to DRI if I want to sell it because DRI has a higher value it’s s investment it’s easy to sell profitable in the market association fee willnt increase ,easy to rent you can use your pts to cruises but forgot to tell us that’s it’s more expenses triple the price, exchange pts with hotels and etc I told her this isn’t the way I want to go vacation I will convert so we can sell it They also told us that if we pay the total amount in certain period of time it’s considered it’s cash. That’s another lie for we were penalized, In 2015 I went to LV for three days with my friend they kept bothering us sand insisted for us to attend the presentation more than half day they were struggling with my friend until they decided to try the sampler the manager even promised them they will give me$100,00 a total of$200.00 because they are two couple my friend kept calling if I receive it in the mail D promised since I never received it I decided to call. As I was told I’m not getting any because they gave my friend a lot of promotion . The two couple were very upset for all the agent there were congratulating me for the money Im going to get. Since I retired last year and we are in financial difficulty I decided to write MrAvril last year . The answer was for me to send $250.00 to transfer the paper works back to DRI and I can’t tell bad things about DRI so it’s mean keep our mouth shut. I wasn’t able to sent for I had to go to PI for emergency now they are asking me to pay the association fee$2400 plus otherwise we will be in big trouble. I really need help to get away from this co. for we really can’t afford to maintain this besides we are already in financial difficulty. I don’t know that other people can cheat and lies just for them to get rich in the expense of other hard working people .Before I forget the last time we went to presentation was last year this guy convinced us if I buy more pts and be in silver category he can help me sell and consequently it’s easier to sell or he will petsuade hid boss to buy it back. The company will buy it back if I will sell it lower than the DRI was selling at that time for it’s not good in the co. The next day when I called him to give me a written note for all the things so told us that nite he said we didn’t understand it’s completely different that’s why we cancelled The additional pts, I hope you can publish this. I hope there will Bea changed so people willnt be taken in all the deciet

    Reply

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