Welcome to the start of another week with Inside Timeshare, last week we published the story of Silverpoint and the news that the court-appointed administrator has completed his review of the liquidations. For Silverpoint and the past management team this was not good news, it now clearly leaves the door open for possible criminal charges to be brought. Unfortunately, we have heard from many readers on the proliferation of cold calls regarding not just Silverpoint but also Azure in Malta.
The nature of these calls is to entice owners into parting with huge sums of cash in order to make a claim against Silverpoint or Azure. As usual, the caller states that they will get the owner out of their contract with a termination and then make a claim, the only problem here is who are they going to sue?
Both these companies along with many others of The Limora Group are in the process of being liquidated, the major law firms involved in current cases are no longer taking on any new cases because of this. It is also a fact that very few cases have ever been through the Maltese Courts against Azure, the main reason for this has been the problem of jurisdiction. This is a problem we have seen with other companies, such as the jurisdictional arguments of Diamond Resorts and Club la Costa.
As we have seen in the past, any news will be used and twisted by the unscrupulous in order to get you to part with your cash, all on the promise of receiving back your full purchase price, from a company that is liquidating. So unless you already have a case in court with a genuine law firm your case will never get to court with any of these callers.
Moving on now to our old friends at Anfi, last week was not a very good one for them, losing at every turn. Not only have they lost in the Court of First Instance, they are also losing every appeal they lodge with the High Court.
In total the courts ordered Anfi to repay clients over 150,000€ in just a few days, this is without all the other payments Anfi will be liable for, such as legal interest and the repayment of clients’ legal costs. Then there are also Anfi’s own legal costs, paying their lawyers, and also the costs of lodging the appeals with the courts.
This does make you wonder what they are playing at, they lose every case in the First Instance, appeal to the High Court, and then lose those appeals, it really does not make any sense whatsoever. Could it be that the management at Anfi are just plain stupid or are they being duped by their own lawyers with dubious appeals?
That is one question we are unable to answer, what we do know is that all of this is a blatant attempt to delay paying clients what is rightfully theirs. In the end, it will not bode well for Anfi and the management team, especially with the Provincial Prosecutors Office making criminal investigations into the movement of funds between accounts, exactly the same as Silverpoint did. As they say, watch this space.
That is all for today, if you have any questions or comments on this or any other article, please use our contact page and Inside Timeshare will get back to you.
Welcome to this week’s edition of Letter from America, this week Irene Parker answers a question asked by many consumers when it comes down to loans/mortgages for the purchase of timeshare. This is very much a problem for our US readers as in Europe and especially in the UK all loan agreements are considered personal loans to purchase a product, any default on the loan agreement is a civil matter and is dealt with by the County Courts. The courts can order the repayment or send in the bailiffs to seize personal property to the value of the loan. The timeshare will not be seized as the loan is not collateralised by the timeshare, after all, it is worthless.
There are not many figures available on County Court Judgements made for defaults on these loans, mainly because they are listed as personal debts not attached to anything but a debt to the lender. For instance, you may have taken out a loan for home improvements, this is treated exactly the same as a loan for timeshare. It should also be pointed out that a County Court Judgement commonly known as a CCJ destroys any credit rating and will prevent you from getting any further finance. Now, considering the average age of timeshare purchasers, they are of a generation that will pay off these defaults as a debt is a debt and to receive a CCJ is out of the question. It should also be pointed out that even if consumers receive a CCJ, they are unlikely to advertise the fact on these timeshare forums, after all, it could be very embarrassing.
Is a Timeshare Foreclosure an Installment Loan Foreclosure or a Mortgage Foreclosure?
Is a Timeshare Foreclosure Considered Mortgage Foreclosure?
On the credit report yes, but not with mortgage lenders: Per HUD mortgage lending guidelines, a timeshare is not treated as a regular foreclosure and is treated as consumer debt.
The U.S. Department of Housing and Urban Development (HUD), the parent of FHA) classifies timeshare mortgages as installment loans and not real estate loans.
By Irene Parker
July 23, 2021
Over the past year, there have been six disturbing reports that indicate timeshare developers are becoming more aggressive in pursuing members who default on loans. If the reports listed below obtained from credible sources are accurate, timeshare buyers should NEVER finance a timeshare, and timeshare attorneys will be provided substantial job security. If you get sued, you need an attorney. There is nothing to prevent a timeshare company from suing a member, but it is more difficult to collect on a timeshare judgment as the loan is not collateralized with anything but the timeshare.
Last week on TIMESHARE TALKSJessica Burke of Virginia Beach Timeshare Rentals discussed the benefits of renting timeshares. Renting avoids the initial outlay, and more importantly, gives the consumer time to evaluate different timeshares so as to make an informed decision as to which timeshare might be right for their family. Host John Raymond is a licensed timeshare broker and founder of Resort Reseller. Timeshares can be purchased on the secondary market for a fraction of the cost.
At a 2019 Florida legislative workshop I attended, Mr. McKelvey testified:
“Most of the developers I know and certainly most of the timeshare managers I know, and I managed timeshare properties for thirty years… every single resort had a dissolution policy, every single one (one). There was a way to get out. You had to come to your management company, and based on what the board of directors instructed us to do in the terms if they had to pay a fee or if they had to be current, whatever those situations were, we did not have a one that did not have a dissolution policy and a hardship policy….”
Timeshare members donate $5 to $10 per contract to ARDA-ROC in mostly “opt-out” donations. These donations are not as voluntary as they sound. When I asked that the $7 not be charged to my credit card along with my maintenance fees, it was charged anyway. When I called to ask that the $7 be removed, I was told they had to fill out an internal form to do so. That was back in January. Another member recently reported they had to call three times to have the $7 removed. Collectively, ARDA-ROC raises approximately $5 million a year from members.
Following are five additional disturbing reports:
One developer’s contract used to specifically state that they do not pursue summary judgments. That language has been removed.
Eric Olsen, an attorney of 42 years, was quoted in Kiplinger, to the ire of timeshare developers, when asked what happens when someone stops paying: “I ran this often-asked question by Salem, Ore.-based attorney Eric Olsen, founder of HELPS, a national nonprofit law firm that helps lower-income seniors with debt they can’t afford to pay. Olsen concluded our interview by urging readers to, “Consider walking away from the timeshare, as they generally have no value. Stop paying and ignore their communications. It will eventually get foreclosed and owing any deficiency is highly unlikely.” Kiplinger, April 26, 2021
Westgate’s VP of Mortgage Services stated in recent court documents that Westgate “probably” has a 30% default rate. Westgate’s lenders can’t be happy with that high default rate. Other developers have default rates that exceed 20%.
Hilton Grand Vacations and Orange Lake/Holiday Inn have sued members defaulting on loans, according to one exit provider.
Another source reported an upsurge in attorney hiring.
What does this mean to timeshare members and owners?
According to HomeGuidesSF:
The company may sue you in civil court to obtain a judgment. If the judge issues a judgment against you, the management company may garnish your wages or levy your bank account to get the money you owe.
Deeded timeshare owners face a different dilemma. If you stop paying on your timeshare loan, you face foreclosure. Foreclosure is the process whereby the lender files to take possession of the property and sell it at auction to recover the money you owe. There are two main types of foreclosure: judicial and non-judicial foreclosure. In a judicial foreclosure, the lender files a foreclosure lawsuit and takes you to court. The judge may issue a deficiency judgment for the remaining balance due after the auction. A non-judicial foreclosure is basically a paperwork shuffle. Your contract authorizes the trustee to sell the timeshare in the event you stop paying on it. You receive the official Notice of Default and the Notice of Sale. In California, the majority of foreclosures are non-judicial foreclosures where the lender cannot receive a deficiency judgment after the sale of the property.
Yahoo Financereporter Abigail Fisher recommends timeshare stocks because consumers are tricked into signing contracts they can’t get out of:
Best Stocks to Buy According to Hedge Funds
We find evil companies to be a very rewarding hunting ground to uncover long-term stock winners. In our opinion companies like Philip Morris (PM), Facebook (FB), Apple Inc. (AAPL), Alphabet (GOOGLE) are evil companies that delivered 1000% or more gains to their investors.
In this article we are going to look at another set of evil companies that use high pressure sales tactics to trick consumers into signing complex long-term contracts that they don’t understand: timeshare marketing companies. Check out this Reddit post where the user is asking several questions about Wyndham timeshare cancellation. This person was able to cancel and receive a full refund, but many consumers don’t cancel within the 7-day or 10-day window specified in their contracts.
How would this reporter feel if the buyer tricked, was her grandmother? Tiffany’s parents were kept for 11 hours, their IDs withheld. They lost their two deeds they had since 1998, and $34,000. They were told that if they didn’t convert their deed to points, maintenance fees would increase from their current fees of $2,000 to $6,000. The transaction resulted in maintenance fees of $6,000 which they could not afford. Tiffany’s interview:
Many timeshare members and owners, who report unfair or deceptive sales and marketing practices, are senior citizens in their 60s, 70s, some in their 80s and 90s. They have maintained lifelong high credit scores, but are faced with little choice but to default on a timeshare loan if the resort dismisses their complaint because they signed a contract. There is little to no secondary market. Coupled with interest rates ranging from 12% to 20% (higher if credit card financing), a timeshare can become a financial nightmare. About a third of those reaching out are younger. The youngest was 19 and pregnant when she signed a perpetual timeshare contract at midnight – after a six-hour presentation.
Timeshare members can negotiate directly with their resort to resolve a dispute, but expect to be challenged with:
You signed a contract,
Your allegations are unsubstantiated,
We are not responsible for what our sales agents say,
You didn’t question this on the recorded closing (because you believed the sales agent or were coached on what to say or not say).
How can this posturing and ongoing war between developers and those providing exit services be healthy for the timeshare industry?
People, members of the media, and even the Federal Trade Commission have started addressing why thousands of members reach seeking release from an unwanted timeshare. The FTC lists Timeshare Sales at #7 on their current Top Ten Scam list and Timeshare Resales (fake buyers) #10.
Related Articles: FTC: Timeshares: Yes? No? Maybe?
Thank you Irene, a very interesting article and I hope it helps to answer some of the questions we receive.
It should also be pointed out that in the UK, one bank, Shawbrook Bank, did acknowledge a few years ago that they did not carry out their due diligence when authorising timeshare loans, meaning many agreements were signed without the affordability checks. The bank set aside around £9 million to cover any defaults on these loans as they would have had great difficulty in enforcing these loan agreements in the County Courts. The CEO at the time was forced to resign as he was the one that arranged the agreements with the timeshare companies.
Another point is all timeshare sales companies must be authorised in order to broker these loans, before April 1st, 2014 these would have been authorised by The Office of Fair Trading and from that date by the Financial Conduct Authority. A case that Inside Timeshare has been following was the validation of these agreements by Barclays Partner Finance for loans brokered by Azure Service Ltd who were not authorised. This validation order would legalise the loan agreement and make it enforceable in law.
Inside Timeshare has already uncovered many timeshare companies who brokered loan agreements with various lenders and have found that the vast majority have never been authorised. This investigation is ongoing and is being used to end loan agreements.
That is all for this week, have a great weekend, and join us again next week for more news and information on the murky world of timeshare.
After a rather lengthy process, the court-appointed administrator has now completed his review of the Silverpoint liquidation and the news is not good for the company or for several key personnel. Although the report is welcome it appears that the administrator has not included some key points which the lawyers behind the majority of cases against Silverpoint expected.
As we know a few years ago, the CEO of Silverpoint placed the company into voluntary liquidation, at the time it was already suspected that it was a ploy by the myriad of companies under the umbrella of The Limora Group to consolidate as much finance as possible for the family of the late Bob Trotta.
This now seems to have been officially recognised as the administrator has concluded the liquidation could have been avoided, had it not been for the mismanagement by the company directors and key personnel.
During his investigations, the administrator also uncovered a huge range of financial and management irregularities which he believes directly contributed to the collapse of the company. Because of this, he has classified the liquidation as “culpable”, which actually means it was a negligent bankruptcy.
The administrator also made it very clear that those responsible for the negligent bankruptcy are the former CEO Mark Cushway and the former CFO Diana Aitchinson. This obviously does not look good for either of them, there is obviously the possibility of criminal charges being brought against them, for that we shall have to wait and see.
On the role of Kwang Boon Sim, who we reported on in our six-part series Exclusive Breaking News: The Truth Behind Silverpoint Exposed, which lifts the lid on the dealings of The Limora Group and Kwang Boon Sim.
Although Kwang Boon Sim was not an employee or director of Silverpoint it was recognised that there is sufficient evidence that he played a significant and very influential role in the company. Remember Kwang was the financial guru for the late Bob Trotta, the Limora Group (of which Silverpoint is a part), and the heirs of Bob Trotta. (see links below to the full series).
It was also acknowledged by the administrator the existence of some very “dubious” transactions between Silverpoint and Excel, this point was brought to his attention by the leading law firm investigating Silverpoint on behalf of their clients, Canary Legal Alliance. These lawyers have also formally requested that the liquidation of all the other companies of Limora Group should also be investigated, which they believe will increase the overall asset value of the liquidation process.
Even though this report is welcome and is good news for the clients of CLA, they had hoped the administrator had gone further with his investigation. For instance, the administrator has acknowledged the role played by the legal advisors of Silverpoint in this situation but has not held them accountable.
It was also hoped that the corporate veil would be lifted, this would have shown a very well-orchestrated decapitalisation of Silverpoint through other entities such as Excel, Signalia and Inversiones Oasis among others.
We should also point out that from a previous investigation by Social Security, they clearly identified and highlighted the link between all these companies, so it does seem strange that all this has not formed part of the administrator’s report. But it is not over yet.
The State Attorney will study the report in detail and then will make his comments to place before the presiding judge. Along with the criminal report launched by CLA in 2019 for “allegedly” hiding and removal of funds and assets in order to obstruct payments to clients during enforcement procedures. This is known as “frustration of payments” and is in itself a criminal offence.
Further information on this can be found on the following link.
So the tangled web of deceit surrounding Silverpoint and their associates is finally becoming clear, it is also hoped that it will result in criminal charges, and those who are guilty face the full force of justice. For many of those who have been the victims of Silverpoint, it may be some comfort that justice is finally on its way.
We end today with a warning to our readers, with a lot of the news coming out about Silverpoint, there are some very unscrupulous cold-callers who will use this information in a twisted way to tempt you into signing up for termination and claim. Please be aware that even the major law firms and independent lawyers in this field are no longer taking on new Silverpoint cases, if you receive any calls on this subject please use our contact page and let Inside Timeshare know the details.