Legal Definition of Timeshare Foreclosures
Timeshares are properties that consumers can purchase limited rights to, sharing the property with other interested people to be used as vacation homes or sources of income from rent. If a timeshare owner is unable to meet the payments and financial obligations of the property, the property can be foreclosed on.
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Definition
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A timeshare foreclosure means that the interest of the owner in default is returned to the bank. Foreclosing on one owner, however, does not foreclose on the interest of any other stakeholders in the property, if they exist. If foreclosed, remaining owner's interests in the property is then split with the bank, or whomever the bank resells the property interest to after foreclosure.
Foreclosure Process
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The process of foreclosing on a timeshare is identical to the process of foreclosing on a residential property. As with residential properties, timeshare foreclosures are governed by state legislation, so the rules in relation to a timeshare foreclosure will vary from state to state.
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Options
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When falling behind on timeshare payments, the owner has the option to sell their interest in the timeshare to any other stakeholders in the property, or even place it for resale on the open market. Selling the interest in the property prior to foreclosure will forestall the foreclosure, with the owner's credit history only being affected by the late payment.
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