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Delinquency Rates

Delinquency Rates - Fraudulent Transfers Remain Key Issues

There are many challenges facing timeshare resorts and many HOAs have been focusing on the fact that fraudulent transfers are contributing to high delinquency rates. Those delinquency rates can lead to cash flow issues that cause resorts to tap into reserve funds earmarked for future expenditures to pay current obligations. That practice can lead to going concern issues that can call into question the solvency of the resort.

Fraudulent transfer companies are those companies that entice owners to pay to have their timeshare obligations tranferred to another person or entity and then fail to use the resort or pay the maintenance fees. Resorts are waking up to the fact that these questionable companies have, for the past several years, done a better job of communicating with owners than they have. As a result, many resorts are now implenting more aggressive communications programs with their owners to let them know that these transactions harm the resort and the other dues paying owner. One resort manager said that when the resort explains the impact these companies are having many owners acknowledge that they weren't aware and they do try to stay in the program.