Timeshare and Federal Reform of the Financial Sector, What Do They Have in Common? December 28, 2010
Posted by John Stephens in : News & Events, Timeshare Resale , 2commentsI had a chuckle when I saw an article last week on Barrons.com about an exemption for the timeshare industry in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law over the summer. This is the Act that will provide new federal regulations for the financial industry as a result of the economic meltdown and subsequent recession that began in 2008.
According to the article, U.S. Congressman Alan Grayson (D-FL), now an ex-Congressman after losing his re-election bid in November, included a reprieve for the timeshare industry in the Act. He introduced an amendment that exempted the industry from new regulations requiring lenders to verify a prospective borrower’s income and employment status before approving a loan. Since a huge amount of timeshare bought through developers at resorts is sold with financing, such a provision could have been catastrophic for the industry.
Imagine a developer not being able to sell a week to a prospect at the sales table because they could not verify their financial and employment details on the spot. What would happen to the timeshare industry? Thankfully for the developers, they’ll never have to find out due to Grayson’s intervention and exemption of the timeshare industry from these new laws.
The reason I had to laugh was because there is a sector of the industry that operates every day without such financing – it’s called the timeshare resale industry. Timeshare sold on the secondary market is conducted, in the majority of cases, without third-party financing unless the buyer organizes his or her own financing prior to the sale.
People looking to buy timeshare on the timeshare resale market have already done their homework, know what they are looking for and can often take as much time as they need to close the deal. They don’t need anyone dangling a finance carrot over them to make a quick sale. You can find plenty of those deals by clicking here.
Maybe if the amendment had not gone through, the transparency and market forces that dictate prices on the timeshare resale market would have been introduced into the new sale dynamic. Thanks to Grayson, we’ll never know.