Well it seems that Inside Timeshare has lost the wager on the name of the director who pleads guilty at court, article published Thursday 21 Sept. In this we said that it would most likely be a Keith Baker or Keith Balker, as that name had been used on many other occasions.
Amador Galeca Abogados have come up with a new name, Mr X has this time pleaded guilty in a Spanish Court, for a timeshare bought and located in the United Kingdom!
Firstly, why would a Spanish court be adjudicating on a case that is clearly outside of its jurisdiction?
Secondly, in all the years we have been looking at this industry, we have not known any timeshare company or directors plead guilty to anything. On the contrary, they have always denied any wrongdoing, finding excuses and legal loopholes to wriggle out of it. Well, not quite, back in July 2009, at Reading Magistrates Court, UK, Gary Leigh (ILG) did unexpectedly plead guilty to 11 counts of the most serious charges.
In our article of 31 July, Keith Balker pleaded pleaded guilty on behalf of Club Class Holidays, could it be as we have been publishing this name for so long they needed a change?
Also the names Keith Baker and Keith Balker are very similar to one of the names of an ILG director Keith Barker. Could this have been a take on that?
Another question that is puzzling us, is in regards to the bank accounts that are being used, the latest being Deutsche Bank, with the name of the so called Procurator Graham Ingum Gorrin. The question is how on earth are these accounts being opened?
Surely in this day and age they must be doing some kind of security checks, after all when I went to open a new bank account, the documentation and proof of residence was extensive. Is this group that well prepared with all the fake documents to open these accounts or is it the banks are failing in their procedures?
To follow the story from the start, search Litigious Abogados in the search box.
Basic rules on keeping your hard earned money safe
As we have warned before, unless you have instructed a law firm to act on your behalf, then there is no case. The courts do not use outside agencies or companies to contact consumers who may have been victims of fraud. If they do need to contact you they will do so through official channels, not by telephone or email.
The courts do not issue cheques, especially from banks that are no longer in existence such as Banesto.
Spanish Courts will not be dealing with cases which have not been purchased within Spanish jurisdiction, so if your timeshare was purchased outside of Spain, then you do not have a case pending.
The Courts will also not appoint any company to investigate a missing cheque and recoup the money from the bank on your behalf.
Yesterday a new name to the ever growing Litigious Abogados family was named, Amador Galeca Abogados, the website was born on 18 July 2017, so is only two months old. Yet according to their website they have over 15 years presence on the net, and they claim to have been a law firm for over 25 years.
The website is exactly the same as all the others that have come before, the only difference is in the photographs and names of the lawyers. This new website now shows some new faces with names that are either variations of previous ones or newly made up.
The address they give on the website is very familiar as it has been used before, Calle de V. Sanz, N14, 16, 38002 Santa Cruz de Tenerife, (it is actually Calle de Valentin Sanz). Number 14 does have a plaque on the wall by the door for an Abogado, but it is not this one here. (We just wonder if this lawyer knows his address is being used).
We will hazard a guess here, but we suspect that the story is going to be along the lines of all the other members of this fake family, your timeshare company or resort is about to be taken to court, for a fee you can also be included in this case. We wonder if the Procurador, who will need to be paid, is one of those we have seen before, or whether a new name will be used, no doubt that will be answered within the next few weeks, as other readers contact us with new information.
If the past antics are anything to go by, within weeks of paying the money, the “client” will receive a fake copy of the court sentence, along with a photocopy of a Banesto cheque with the awarded amount printed with their name on it. (Remember Banesto has not existed since 2012).
There will also be an accompanying letter stating in English that the director of the company pleaded guilty to all charges, (anyone fancy a wager that it will be Keith Baker or Keith Balker). You will then be asked to pay 21% of the awarded amount as tax to have the cheque released, which will arrive by post. Only problem is that it will never arrive, the envelope will be open, a letter from the court will be there but no cheque.
Now we go to stage three of this very clever operation, you will receive from another company a letter stating they have been appointed by the court, they are to investigate a Romanian gang who stole and cashed a cheque with your name on it. They will also pursue the bank to recover the money for you, you only have to pay them 10% of the cheque value. As we say this is a very clever ongoing sting. So far we don’t yet know what happens next, we have not come across anyone who has made it to stage four. But we do suspect that in order to get the money that has been recovered, another “TAX” will need to be paid.
These claims always sound fantastic, the amounts of money they promise you and in such a short space of time are designed to play on your emotions, then slowly drain away all your money before you realise what has happened.
Our only advice is if you are contacted by any company that tells you a case is about to go to court against your timeshare company or resort, then with a fee you can be included,
STOP, THINK AND DO YOUR HOMEWORK.
If you are unsure how to check any company that makes these promises, or just need confirmation, contact Inside Timeshare and we will point you in the right direction.
They also have some new names, which are variations of those that have been used before, and what looks like a few new faces in the photographs of the “lawyers”.
Once again it is going to be the same old story, we are taking your timeshare company to court, it is scheduled for trial within the next few weeks, pay ex-amount and be part of it. Then suddenly you are told you won, as the director, (we’ll bet it is Keith Baker or Keith Balker again) has pleaded guilty.
We will be publishing a fuller post on this when we have done a little more research.
This one from reports is against Silverpoint, with the court declaring the contract null and void with the return of over £63,000 plus legal interest and legal fees. They also had another win against Silverpoint at the Court of First Instance in Tenerife. Again the contract was declared null and void and the return of over £59,000.
So now on with the article which was supposed to have been published in last Friday’s Letter from America.
Timeshare and Asset-Backed Security Products
By Michael Kosor
September 20, 2017
There has been an increase in defaults for some timeshare companies concerning timeshare loans packaged in their Asset-Backed Securities (ABS) products. The average consumer will recall the devastation its sister security, the Mortgage-Backed Securities (MBS), created that triggered financial collapse. Consumers and regulators should pay attention to the timeshare product today so similar to the products of 2007 that led to financial devastation.
I believe this is clearly and directly related to the increase in litigation by these particular developers, targeting consumer advocates and the legal community. While there definitely are attorneys practicing questionable business practices, “Kill all the lawyers” is not the answer. Every citizen has a right to legal representation if they feel they have purchased a product sold by deceit.
Developers are rightly hypersensitive to any bad press that points to increases in loan defaults as they are sure to negatively impact ABS rating/pricing. The ABS product and the associated market are by nature complicated, not part of our public market system, so limited to sophisticated players. As such, it is not a part of mainstream news. To that end, watch a very short video published by Allison Bisbey, Editorial Director, Capital Markets Newsletter.
Some developers are experiencing an elevated level of defaults. In the case of Diamond Resorts, it has reached a point the rating agency for DRI, KBRA (Kroll Bond Rating Agency) recently saw fit to issue a note on the issue, albeit not surprisingly, a reaffirmation of KBRA’s original rating.
A timeshare ABS is a security whose income payments, and hence value, is derived from and collateralized or “backed” by a pool of underlying assets. Contrary to popular opinion, “hard” assets do not serve as the primary collateral – only the contractual obligation to pay. However, hard assets do provide secondary security and impact overall price/return.
Today, the vast majority of timeshare loans are not backed by any real property interest. Timeshare ABSs sold today are little more than securitized consumer loans. Yet when I talked to the Moody analysts just a couple weeks ago about their most recent WyndhamABS rating, they stated they use criteria established in 2003 – when a timeshare loan was typically still attached to a real estate interest.
In rating an ABS, comparisons with historical loan default rates are critical. Timeshare ABSs, notably a different underlying product than the one packaged today, report very limited/zero defaults. This is not because the consumer default rate is or was low – to the contrary. Rather, DRI (not unlike Wyndham) uses ABS structure options allowing them to repurchase or substitute all of its defaulted loans. As a result, the ABS reports defaults as 0% while actual consumer defaults are much higher. (Note a 6% – 8% default rate for “aged” loans is informally used, if any pre-option rate is reported or available at all). Aged loans have a proven repayment history of 6 months or more. The “aged” number does not include what is certainly a much higher total consumer default percentage of timeshare loans when early defaults are included.
The repurchase and substitution option in an ABS is typically capped at around 15% of the total. More importantly, the rating agency should not (but appear to nonetheless) give credit to the option to repurchase or substitute defaulted loans. Gross loss expectations are increasing also. It is reported in the investor literature as 11 – 12% in prior years to 13-14% today; dangerously close to underwriting limits.
Wyndham and DRI would like its debt investors to believe the increase in defaults is due to an uncharacteristically high number of borrowers being solicited by lawyers and “scammers” offering to get consumers out of their timeshare. Thus, we see the rise in Cease and Desist letters and litigation targeting consumer “friendly” legal providers.
What is more, ABS investors, thus the developers selling timeshare ABSs, are hypersensitive to cash flow. Admittedly a bit desensitized since 2007, they will nonetheless respond when issues or news challenge a specific ABS or a class of ABS, such as timeshares.
Timeshare regulators (assuming any exist and/or pay attention) also need to be reminded that in 2007 investors experienced losses because they made decisions on bogus ratings, guarantees from mono-line insurers, and a blind faith in historically real-estate prices. Simplistically, people ignored the quality of the contractual cash flow, relying instead on history (home price appreciation in the case of the MBS). This sounds analogous to timeshares today.
With the rise in Social Media, timeshare members are more and more expressing increased owner unrest, disturbed by a rise in consumer complaints, as evidenced by Mark Brnovich’s issuance of Diamond’s Assurance of DiscontinuanceAOD fueled by over 900 consumer complaints. Is anyone paying attention?
I spoke to a Wyndham executive last month at my VOAs annual meeting. He saw this issue as a problem caused by lawyers seeking timeshare members and a major problem. With an aging population of original buyers who no longer want or need their timeshare, many don’t know where to turn when there is no secondary market and the contract is perpetual.
On a similar line, most all ABS, to include timeshares, are supported by significant “credit enhancements” to protect the investors from higher than anticipated (historical) default rates. Overcollateralization (issuing less debt than total assets held) is a particularly valued credit enhancement technique used. However, overcollateralization becomes tricky, even suspect, when the assets held by the seller have no explicit face amount/market established price as with the non-viable timeshares resale market. My impression is most agency raters, while sophisticated financial types, are not educated on the underlying change of the timeshare product pool being securitized, as most are reliant on the developers for their information and understanding.
Finally, as I noted earlier, reported default rates are zero. As a result, most rating agencies, I argue to retain clients, and many investors, dependent on industry reporting, do not dig any deeper. Both sides see no news as good news – once again analogous to the 2007 mortgage back securities fiasco. This needs to change.
Thank you Michael, not being of a financial mind, the article has been a bit of an education, I just didn’t know these things went on.
There we have it, look out for the article on Amador Galeca, more important beware of any calls or emails promising that you have money waiting for you. The truth is you haven’t, all they want is your money, so stay safe, keep your money in the bank and do your homework before parting with it.