DVC Foreclosure Sheriff/Public Sales

Discussion in 'Purchasing DVC' started by twinsouvenirs, Aug 19, 2013.

  1. twinsouvenirs

    twinsouvenirs Mother of Dragons :)

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    Question for some of you who have been watching the foreclosure crisis and it's affect on DVC... do the DVC properties go through the same public judicial foreclosure process as other deeded properties, and if so, do the properties usually sell at public auction as other deeded properties? I know that many take a deed in lieu of foreclosure, but where an owner simply becomes unresponsive that is theoretically impossible. If so, has anyone bought one at sheriff/public sale?
     
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  3. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    It would only happen if the owner did outside financing.

    DVC just takes back contracts that they finance and contracts that didn't get the dues paid.

    :earsboy: Bill
     
  4. twinsouvenirs

    twinsouvenirs Mother of Dragons :)

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    How do they take them back? Is it through any kind of due process? We didn't finance so I've never seen any of the language.
     
  5. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

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    DVC contracts are sold at public auction. Search the Orange County Comptroller website for foreclosures and you'll eventually find some with accompanying documentation which lists details on the sale process.

    I understand that at least one DVC reseller will occasionally buy contracts and then re-sell at a profit. Disney can also bid on the contracts but I suspect it is not a high priority; more work than ROFR and they don't even utilize ROFR to its full extent.

    I'm sure there are also private individuals who try to flip contracts for profit.
     
  6. twinsouvenirs

    twinsouvenirs Mother of Dragons :)

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    Huh!

    I have to see if it's easy to sign up... if so, that would be a good way to add on. However, bidding against a broker might be a pain... almost as much as bidding against plaintiff to total debt, but if they aren't bidding, that makes it easier.

    I just saw one that sold in mid July to Plaintiff (Palm Financial Services) for $100.00. It was .449 of an AKV unit. For a $100. GULP.
     
  7. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

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    Palm Financial Services is DVC's internal financing outfit. Without seeing the documentation, that one sounds like a foreclosure. Probably $100 in fees associated with the transfer.
     
  8. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    What happens with Disney's ROFR if the property goes to auction?

    :earsboy: Bill
     
  9. KAT4DISNEY

    KAT4DISNEY Glad to be a test subject

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    I bought a contract that when it went to ROFR Disney responded that they had taken it back (dues were behind). Then they responded that there was a paperwork glitch and although it was supposed to have been listed for auction the file had been missed so they would allow the sale to go thru to me.

    So - it led me to believe that even contracts that go back to Disney can end up at auction.
     
  10. twinsouvenirs

    twinsouvenirs Mother of Dragons :)

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    Did you buy it in the public auction process, and was it difficult?
     
  11. tjkraz

    tjkraz <img src="http://www.wdwinfo.com/images/silver.jpg

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    Yes, I neglected to respond to this point earlier. Even if Disney has financed the purchase, they don't just "take back" the contract lock, stock and barrel if payments are missed or dues behind.

    There are situations where (just to illustrate) Disney is owed $5,000 on a contract realistically valued at $10,000. A court wouldn't just give that $10K asset (contract) to Disney and consider the situation resolved. Instead it would likely be put up for auction with Disney's outstanding debt satisfied first and then the rest of the auction proceeds going back to the original owner or his/her estate.

    Under different circumstances, the courts and Disney (Palm Tree) could come to a different agreement on how to resolve the situation.

    When these things hit the courts, the courts are looking for the outcome which best suits all parties. There's often a bankruptcy or death (estate) involved, with other parties hoping to get their hands on excess funds.

    I want to say that ROFR doesn't apply to auctions but am not 100% certain.

    I do know that you have to be physically present in Orlando to participate in the auction and some cash (or cash equivalent) payment must be made same-day.
     
  12. KAT4DISNEY

    KAT4DISNEY Glad to be a test subject

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    No. I had bid on this listing thru Fidelity and either the owners didn't know or weren't upfront about the situation. Disney responded immediately the day Fidelity went to verify the points and thru this quirk of a clerk missing the filing I was able to purchase it from the owner who then would have had to pay off Disney.
     
  13. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    Looking at the Orange County website it appears that all of the DVC foreclosure auctions are won by Disney for the amount of $100.

    :earsboy: Bill
     
  14. Trooper8286

    Trooper8286 TK8286

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    Foreclosures are tricky business and it largely depends on the lender and the accompanying contract if how it goes down. A timeshare is like a deed and contract hybrid. To that extent,the method for resolving a delinquency can vary by lender and by circumstance. Failure to pay MF would result in one method and failure to make monthly payments on the indebtedness could result in another. One would be a breach of contract with Disney and the other a loan default. Foreclosures can also be expensive there are filing fees, notice fees and sometimes advertisement expenses. that is why you see so many deeds in lieu of foreclosure.....a less expensive mechanism to revert title back to DVD.

    I used to do some foreclosure work and I would be wary of trying to find a "deal"by foreclosure. When a resale closes there is a title check of sorts done to ensure no pending reservations made after contract by the broker, and I am told by Disney as well. Imagine the quagmire of attempting to buy a contract at foreclosure, trying to verify the status of reservations as a non member prior to bidding and then waiting for the process to finalize. There are other pitfalls like notice to the owner and verifying that the foreclosure was procedurally correct. Some attorneys make a living by doing foreclosures and examining the title of properties coming out of foreclosure. Lots of bases to be tagged and opportunities to have a de-rail.

    You probably could do it, and it may work out just fine..... But It makes me think of a soup sandwich given you can buy resale and have a broker and then the title company to ensure proper transfer....

    Sent from my iPhone using DISBoards
     
  15. DenLo

    DenLo DIS Veteran

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    Thanks Jay, I think you really understand the process.
     
  16. twinsouvenirs

    twinsouvenirs Mother of Dragons :)

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    So I've been digging, looks like most are purchased back by the mouse. In fact I am still looking for one purchased by a third party. I see some competitive bidding but not a lot, and it looks like only one bidder, who is outbid at the $6k mark by DVD.

    You can bid online at the OC Clerk. Lots of Upcoming sales, many on SSR, BLT and OKW.
     
  17. fflmaster

    fflmaster DIS Veteran

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    I have to say I was curious as well on this foreclosure idea.

    I can't find one time that DVD didn't buy back. Can anyone find any outside buyers that win any of the bids?
     
  18. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    How much are they paying to buy them back?

    :earsboy: Bill
     
  19. dmunsil

    dmunsil Disney Uber-Nerd

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    Almost all that I can find were purchased by Tom Yeary, owner of the Timeshare Store, and the last one was in 2008.

    On the Orange County web site, search for deeds where the grantor is "ORANGE", put "-DISNEY" for "both parties" and set that to "wildcard search" and then on the second page of criteria put "DISNEY" in the legal remarks field. Then uncheck the "Uncheck to search specific document types" box and select "Deed" as the document type.

    I get 98 hits. Some are clearly misfiled, and are not a Disney property at all. A bunch went to Thomas Yeary. Some went to Palm Financial, which is Disney's financing arm. Some went to Baker and Hostetler, which is Disney's law firm. There are a couple where it was bought back by the people who owned it originally. That's about it. There might be one or two others where someone else bought the property.

    I would guess in a lot of these cases, there is money owed on the property that is worth more than the property itself, so the only entity interested in bidding on it is Disney. Those are the ones that are transferred for the minimum price to Disney or Palm Financial. The ones where the property is worth something, I would guess there are a few people who are willing to bid it up until it hits a reasonable resale value, and then Disney overbids and takes it.

    It's almost always going to be worth more to Disney than to a reseller, so I doubt there are any screaming deals to be had. If there were, Tom Yeary or someone else would be snapping them up.
     
  20. DreamChasers

    DreamChasers Mouseketeer

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    I was curious so I took a look at the web site and found a BLT contract that looked like it might be a good deal, but I am not sure. It said that the unit number was 22A and the ownership interest was 0.5092%. So the big question is how many points is that? I figure the A probably means it is part of a lock off, but is it the one bedroom or the studio? Is it a standard view or a theme park view? Is there any way to know?
     
  21. doombuggygal

    doombuggygal Earning My Ears

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    The unit number on the deed means nothing. It's just a formality that has to go into the deed to show that you are a fractional owner of an actual physical property. The percentage is more important. Not sure exactly how many points that percentage is but for reference, we own 300 points at BLT and our deed states we have a 0.8578% interest.
     

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