From the Orlando Sentinel....
The Walt Disney Co. has begun using a new system of handling foreclosures on its time-share contracts that is faster and more efficient, but could make it tougher for outsiders to bid on the memberships at auction.
Nonjudicial foreclosures, also called trustee foreclosures, circumvent a lengthy court-system process. Time-share memberships still go to public auction. But trustees designated by lienholders can act as auctioneers. So some of Disney's auctions are taking place at a law firm representing the company, rather than online through Orange County's clerk of court.
Disney said it began using the system for convenience.
"This would seem to be a quicker and cheaper way," said attorney Justin Moorefield, who helps people undergoing foreclosure obtain surplus funds from sales and whose wife used to bid on foreclosed Disney Vacation Club memberships. Still, he said, bypassing the court system could give Disney more control over the process by making it difficult for competitors to submit bids.
Florida Legislature in 2010 passed a law allowing nonjudicial foreclosures for time shares. Florida joined about 30 other states that allow the process, according to time-share trade group American Resort Development Association. At the time, the court system was backlogged with all types of foreclosures, said Chris Stewart, director of state government affairs for ARDA.
Going to the new system, Stewart said, meant "you went from a period of time when it was taking a year or more to foreclose … to 90 days in a typical case."
Stewart said the purpose of the legislation wasn't to make it more difficult to bid on properties. He noted that the Orange County clerk of court wasn't even offering auctions online when the bill passed. The clerk's office started Web-based auctions in 2011, the following year.
The legislation built in protections for consumers, Stewart said. Time-share owners facing foreclosure can opt out and go through the court system if they choose. Also, associations or companies choosing to reclaim properties through nonjudicial foreclosures waive their rights to seek money from delinquent owners.
Disney said it has sold dozens of contracts since mid-November but has filed only one foreclosure through the court system. It added that it has had third-party bidders in its nonjudicial auctions and that some of them have won deeds.
"Non judicial foreclosures actually do possess attributes favorable to both sides of the fence, developer and consumer," said Greg Crist, chief executive officer of the National Timeshare Owners Association, in an email.
Despite the inconvenience to out-of-town bidders, There could be some positives to the new system, said Wil Lovato, who tracks legal proceedings for the website DVCNews.com.
"Like any type of law change, there's people who will be winners and people who will be losers," he said.
Nonjudicial foreclosures, also called trustee foreclosures, circumvent a lengthy court-system process. Time-share memberships still go to public auction. But trustees designated by lienholders can act as auctioneers. So some of Disney's auctions are taking place at a law firm representing the company, rather than online through Orange County's clerk of court.
Disney said it began using the system for convenience.
"This would seem to be a quicker and cheaper way," said attorney Justin Moorefield, who helps people undergoing foreclosure obtain surplus funds from sales and whose wife used to bid on foreclosed Disney Vacation Club memberships. Still, he said, bypassing the court system could give Disney more control over the process by making it difficult for competitors to submit bids.
Florida Legislature in 2010 passed a law allowing nonjudicial foreclosures for time shares. Florida joined about 30 other states that allow the process, according to time-share trade group American Resort Development Association. At the time, the court system was backlogged with all types of foreclosures, said Chris Stewart, director of state government affairs for ARDA.
Going to the new system, Stewart said, meant "you went from a period of time when it was taking a year or more to foreclose … to 90 days in a typical case."
Stewart said the purpose of the legislation wasn't to make it more difficult to bid on properties. He noted that the Orange County clerk of court wasn't even offering auctions online when the bill passed. The clerk's office started Web-based auctions in 2011, the following year.
The legislation built in protections for consumers, Stewart said. Time-share owners facing foreclosure can opt out and go through the court system if they choose. Also, associations or companies choosing to reclaim properties through nonjudicial foreclosures waive their rights to seek money from delinquent owners.
Disney said it has sold dozens of contracts since mid-November but has filed only one foreclosure through the court system. It added that it has had third-party bidders in its nonjudicial auctions and that some of them have won deeds.
"Non judicial foreclosures actually do possess attributes favorable to both sides of the fence, developer and consumer," said Greg Crist, chief executive officer of the National Timeshare Owners Association, in an email.
Despite the inconvenience to out-of-town bidders, There could be some positives to the new system, said Wil Lovato, who tracks legal proceedings for the website DVCNews.com.
"Like any type of law change, there's people who will be winners and people who will be losers," he said.
