DVC Defaults Mean More Liability for Mouse

[WDW1974]

http://www.orlandosentinel.com/business/orl-disney-time-shares-080609,0,7634529.story
Don't intend to spend the weekend online debating what this means, but thought this might be of interest to some as it is real news.

I just hope I can get a cast rate at the BLT this fall!

 

[SirGoofy]

Hopefully Jay is shaking in his boots somewhere...

 

[Wilt Dasney]

A lot of moving parts in that story. My first impression was that Disney might be betting that the economy is turning around, and so are willing to take on added liability in hopes they won't have to pay up? Of course, I'm guessing it will be a while before the housing market — much less the vacation housing market — picks up, so that might be a stretch.

My nominee for the most useless, uninformative quote ever:

"This is an adjustment that assures Disney can continue providing the top-quality service our DVC members have come to expect," Disney spokesman Jonathan Friedland said.

Notice the reporter didn't even try to translate that into anything meaningful. :lol:

 

[miles1]

Thanks for the post- I was wondering what the default rate was on the DVC loans and I had no idea that Citibank was involved. For some reason I'm surprised its not higher. With so many people in trouble with their primary home mortgages, one would think that a relative frivolity like time share payments would be in even greater default. I guess it speaks for the demographic of DVC owners.

 

[Computer Magic]

This was first talked about yesterday.

http://forums.wdwmagic.com/showthread.php?t=473814

I tend to agree with this poster:

I am sure I am not seeing all there is to be seen here, but it seems to me that defaulted loans would be an asset to DVC.

The collateral is EASILY repossessed, without any damage or substantial loss of value. The company has collected money from the original sale. They have either collected interest, or sold the loan to a third party. They then reaquire the property and can sell it again.

Yes there is some cost associated with it (legal fillings, etc.), but it would seem they would have enough volume to have the personnel in house.

Disney can resale the product for $83 per point. So 150 points nets disney another $12,450. The question is whether the market is oversaturated. Disney is really banking on DVC, two major additions over the last couple years.