Is Timeshare Foreclosure Considered Mortgage Foreclosure?
This BLOG On Is Timeshare Foreclosure Considered Mortgage Foreclosure Was UPDATED On February 26th, 2019
Timeshares used to be extremely popular throughout the United States. Timeshares are where a group of investors investing in a subject property in a resort area. Each investor has a certain period of the year allocated to them and their families to enjoy the subject property exclusively for themselves.
- Timeshares are a luxury option for vacations
- It is somewhat of a vacation home that can be used by the family for a certain time each year
- When a timeshare owner buys a deeded timeshare property, they get a portion of the rights to the subject property
What Are Timeshares?
Timeshare unit owners, like homeowners, pay their portion of the fees and costs of maintaining the timeshares.
- Homeowners insurance, association dues, property taxes, and property maintenance fees are assessed and each timeshare unit owner is responsible for their portion of the expenses
- In the event timeshare owners have a mortgage on timeshare, they are responsible for paying the mortgage payment as well
- In a sense, it is a second home but the acquisition cost is much less because owners only have rights to the timeshares for only a certain period every year
- Timeshare owners who do not pay their portion of the expenses in the timeshare unit, the timeshare management company can foreclose on the timeshare
Timeshare Foreclosure Process
Timeshares, like residential homes, can be foreclosed for timeshare unit owners who are in default of their mortgage and housing payments.
- The timeshare mortgage lender and/or timeshare management company is responsible for initiating the foreclosure proceeding after the timeshare owner is in default of his or her monthly obligations
- The U.S. Department of Housing and Urban Development (HUD), the parent of FHA) classifies timeshare mortgages as installment loans and not real estate loans under HUD 4000.1 FHA Handbook
Waiting Period After Timeshare Foreclosure
Is A Timeshare Foreclosure Considered Mortgage Foreclosure? A timeshare foreclosure on credit report is treated like regular residential home foreclosure. Reported on a credit report, it can significantly drop credit scores.
- A timeshare foreclosure will stay on credit report for 7 years like any other foreclosures
- Timeshare Foreclosure Considered Mortgage Foreclosure? On the credit report yes, but not with mortgage lenders
- Timeshare foreclosures have been skyrocketing after the 2008 real estate and banking collapse
- Most lenders will treat Timeshare Foreclosure Considered Mortgage Foreclosure
- If a lender treats timeshare foreclosure considered mortgage foreclosure, then they will require a three year waiting period
- FHA Borrowers with a foreclosure on their record need to wait 3 years from the recorded date of the foreclosure for them to qualify for FHA Loans
- Many lenders can treat a timeshare foreclosure as a regular foreclosure
- But per HUD mortgage lending guidelines, a timeshare is not treated as a regular foreclosure and is treated as a consumer debt
Gustan Cho Associates does not treat Timeshare Foreclosure as a real estate foreclosure so we do not have any waiting period after foreclosures on timeshares.
Qualifying For FHA Loans With Timeshare Foreclosure
Timeshare owners who had a previous timeshare foreclosure and need to qualify for FHA Loans can contact The Gustan Cho Team at Loan Cabin at 272-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org. Gustan Cho Associates at Loan Cabin Inc. are direct lenders with no mortgage overlays on government and conventional loans.
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