Original Message:
Foreclosure for non payment of fees vs. defaulting on a loan (by KC):
ashleyg147 wrote:Question regarding the foreclosure option of stopping payments, I have been told that this won't affect your credit. How can that be true? Don't timeshare companies, specifically Palm Beach Resorts, report to the credit agencies?
Contrary to an incorrect statement made above a few posts above in this thread, foreclosure can (and frequently does) occur for deeded timeshare ownerships (i.e., not club memberships or pure points contracts).
Deeded week timeshares are indeed literally a form of real estate, even though each individual owns only a small fraction of the whole. Nonetheless, it's still real estate ownership. You pay property taxes on the ownership and you can most certainly be foreclosed upon (for non-payment of maintenance fees).
Defaulting on any loan is a distinctly separate and entirely different matter. Defaulting on a loan will virtually always result in negative credit reporting (in addition to foreclosure). However, if a timeshare is fully paid off (i.e., there is NO unpaid loan balance outstanding) and the owner has historically kept current on maintenance fees, only very rarely will there be any negative credit report consequences after foreclosure for later non-payment of maintenance fees. Can they initiate negative credit report just for foreclosure, even if there is no default on a loan? Yes, absolutely. Do they actually bother to do so? No, as a general rule they do not, with only very few exceptions. It's only the defaulting on a loan that basically guarantees negative credit reporting.