Buying foreclosure- what does .2672% of unit 107B mean?

I've made numerous bids over the last 6 months on contracts that I was interested in but each time Disney had outbid me close to or over the going resale prices at which time I stopped bidding.
DVC is definitely a sellers market right now and Disney is the biggest seller. They can buy for close to resale and turn a profit at their direct prices...
 
I've made numerous bids over the last 6 months on contracts that I was interested in but each time Disney had outbid me close to or over the going resale prices at which time I stopped bidding.

That's interesting. I wonder why they would be willing to bid to/over resale prices when they can just ROFR any contract on the resale market. I know they would still turn a huge profit selling at direct prices, but it doesn't seem like it would be worth their time.
 
That's interesting. I wonder why they would be willing to bid to/over resale prices when they can just ROFR any contract on the resale market. I know they would still turn a huge profit selling at direct prices, but it doesn't seem like it would be worth their time.

I could be wrong but my guess it's because the majority of the proceeds and judgement goes directly back to them and not the buyer they foreclosed on, where as on resale ROFR they having to pay the seller along with any other fees agreed upon.

As for being worth their time, they have to go through the formalities of foreclosure anyways, in which they get the option to place a hidden max bid, so it's not like someone at Disney is sitting on a computer bidding up the auctions.
 
I guess based on when the contract was placed into foreclosure could give you some info on points status. Meaning if in 2016 it was posted as being in default, thus the owner could not use the points. Here we are in 2018 so they did not use 2018, but could have possibly used 2017 points. Likely not a fully stripped contract. When you follow the paper trail it is interesting to see how long it takes to go from being listed as a foreclosed property to actually going up for auction.

I have watched them for a bit. You have some flippers who buy foreclosures (you see their name on the OCC both as buyers then sellers of the same contracts), then flip them into the resale market.

So your competition are these flippers and Disney. Disney is often the winner of these contracts so that keeps the price up when you go against them. I still can’t understsnd why they have to bid on their own properties. Maybe someone else has an understanding of that.

If you do your homework researching on the OCC and know exactly what you are bidding on and have the cash to pay in 24 hours of the auction, then this might be a way to buy. The research takes a bit of time which might be a turn off to many.
 


I guess based on when the contract was placed into foreclosure could give you some info on points status. Meaning if in 2016 it was posted as being in default, thus the owner could not use the points. Here we are in 2018 so they did not use 2018, but could have possibly used 2017 points. Likely not a fully stripped contract. When you follow the paper trail it is interesting to see how long it takes to go from being listed as a foreclosed property to actually going up for auction.

I have watched them for a bit. You have some flippers who buy foreclosures (you see their name on the OCC both as buyers then sellers of the same contracts), then flip them into the resale market.

So your competition are these flippers and Disney. Disney is often the winner of these contracts so that keeps the price up when you go against them. I still can’t understsnd why they have to bid on their own properties. Maybe someone else has an understanding of that.

If you do your homework researching on the OCC and know exactly what you are bidding on and have the cash to pay in 24 hours of the auction, then this might be a way to buy. The research takes a bit of time which might be a turn off to many.

Disney Corporation isn’t really buying anything, I don’t think. As I understand it, Palm financial is the lending institution that is foreclosing on the property. I believe Disney owns Palm Financial (wholly owned subsidiary).

So, Disney Vacation Developement is bidding on the property so they can retake ownership and resell the contract. Whatever DVD pays for the contract goes to Disney’s bottom line, eventually, through Palm financial. If DVD gets the contract a for a steal and Palm financial winds up in the red on that particular loan. All that means to Disney Corp. is that DVD will have a larger profit margin on those points and that will also, eventually, end up on Disney’s bottom line.

Now, Palm and DVD are separate companies just with the same owner. They cannot communicate to each other about the contract being foreclosed on. I.e. Palm can’t tell DVD that contract #123456789876 is in default and Palm will need $8000 to make this debt even on their balance sheet. Palm, as a subsidiary, has an interest in selling this for the most amount of money possible in order to be as profitable as possible. DVD, as a subsidiary, has an interest in paying as little as possible for the contract so they can turn the greatest profit and make their balance sheet look as good as possible. Parent company Disney will, essentially, wind up with the same amount of profit in the end no matter which source is reporting it.

The only losing scenario for Disney is if DVD doesn’t participate in the foreclosure bid. Let say Palm “needs” $8000 on a contract to just cover their losses on the loan and someone like you or me bids $6000. If DVD does not participate, you or I would win. That $2000 loss will eventually make its way to Disney Corp. balance sheet. Since DVD did not take ownership of those points, there will be no profit on the reselling of them to offset that loss. To prevent that scenario, Disney Corp. has an incentive to order DVD management to buy every foreclosure contract even if that means paying more than the resale market is demanding, effectively pushing you and I out of the bidding.

The best part for Disney is, even if Palm loses money on the loan and DVD does not take the points to resell at a profit, they will still eventually make money because whoever bought the points will be going to WDW and buying admission, food, drink, merchandise and tours! They truly get that money coming and going!
 
Disney Corporation isn’t really buying anything, I don’t think. As I understand it, Palm financial is the lending institution that is foreclosing on the property. I believe Disney owns Palm Financial (wholly owned subsidiary).

Thanks for the great explanation!
 


Wasn't it reported that Disney takes steps to make it difficult for others to pick up the foreclosures?

:earsboy: Bill

 
Wasn't it reported that Disney takes steps to make it difficult for others to pick up the foreclosures?

:earsboy: Bill


That what I had also read and for a short time it looked like they were being held at the courthouse but now look to be by electronic sale again.
 
So can you search the listings easily or do you just have to browse for “timeshare” and look at the documents to see if it is a DVC property?
 
I have purchased 2 foreclosure contracts...what you need to know is once everything goes through you must pay all back MFs and interest penalties...and no...you will not get the past points - only what is current. These fees can add up if you have not planned for them.
 
So can you search the listings easily or do you just have to browse for “timeshare” and look at the documents to see if it is a DVC property?

The only thing I could figure out was the click on the Timeshare links and if Palm Financial was involved.
 
I have purchased 2 foreclosure contracts...what you need to know is once everything goes through you must pay all back MFs and interest penalties...and no...you will not get the past points - only what is current. These fees can add up if you have not planned for them.

That’s the scary part of considering this. You could end up bidding slightly less that resale and end up paying MORE than resale.
 
I have purchased 2 foreclosure contracts...what you need to know is once everything goes through you must pay all back MFs and interest penalties...and no...you will not get the past points - only what is current. These fees can add up if you have not planned for them.
Is there a way to estimate the worst case scenario? How many years back could it be with penalties?
 
Is there a way to estimate the worst case scenario? How many years back could it be with penalties?
There is...kinda. You must look at the date of the foreclosure...most will be dated 2016 or 2017. You can figure out MFs from there...however the interest and penalties can get quite expensive when you are looking at 3 years of accumulation.
 
That’s the scary part of considering this. You could end up bidding slightly less that resale and end up paying MORE than resale.
You are correct! I was watching the auctions last Tuesday and they were going well over resale prices NOT including accumulated interest and penalties.
 

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