Original Message:
Blanket statements are rarely completely accurate... (by KC):
jessicaw349 wrote:Why is everyone calling it a foreclosure and a mortgage? You don’t own anything with a timeshare, you can’t sell the property and you can’t rent it out. So how is this a mortgage???
Not factually correct, as stated. Many / most (but not all) timeshares are in fact deeded ownerships. We've owned several such deeded ownerships for many years, still do. Timeshare deeds get officially recorded (usually in the applicable County, in most of the U.S.), just as with other real estate. Deeded timeshare ownerships (unlike vacation club or "pure points" RTU contracts) are literally real estate ownership, with accompanying annual property taxes. Accordingly, when maintenance fees are not paid for a period of time (regardless of whether or not there is an associated loan), foreclosure will ultimately occur and the developer or HOA will retrieve ownership of the deeded interval.
Timeshare ownerships can indeed be rented by the owner of that interval, if the account is paid up to date. However, a timeshares with an attached unpaid loan obviously cannot be sold until or unless that loan is satisfied. No buyer wants any part of assuming someone else's debt --- and timeshare loans are usually not transferable anyhow.
Defaulting on a loan is distinctly different from foreclosure. Defaulting on any loan will result in a negative credit report; foreclosure on a fully paid timeshare rarely has any such negative credit report consequences.