Disney World is a big draw for buyers of timeshare units, but proximity to the Magic Kingdom is no guarantee that the buyers will avoid foreclosure.
The number of foreclosed timeshare units near Disney World in the Orlando area has fallen from the levels of 2011 and 2012 but still tops 900 a year.
The Walt Disney Company did not disclose the default rate on timeshare loans originated by the Disney Vacation Club. But the company said it is “significantly less” than the industry-wide 6.3 percent default rate on timeshare loans calculated by the American Resort Development Association.
Palm Financial Services, a Disney affiliate that handles all foreclosures on timeshare units financed by the Disney Vacation Club, handled 928 in 2014 in Orange County and more than 900 last year, according to county records.
Many of the units the Disney Vacation Club has foreclosed are concentrated in three resorts near Disney World: the Saratoga Springs Resort & Spa, the Animal Kingdom Villas and Bay Lake Tower at the Contemporary Resort.
Disney timeshares tend to have high resale value, so some industry observers are surprised that hundreds are sold annually at foreclosure auctions in Orange County.
Chris Skeldon, vice president of sales at Fidelity Real Estate, which resells timeshares, told the Orlando Sentinel he is “shocked and surprised. I think virtually anyone who’s in foreclosure with a Disney property, the vast majority of them have options they may not know about.”
Disney often buys back the deed to a timeshare unit in foreclosure, often for a nominal bid. But in some cases, multiple bidders emerge to acquire timeshares in foreclosure.
Indianapolis residents Brad Shaffer and Keith Dickerson bought about 20 Disney timeshare units in foreclosure last year. Shaffer told the Orlando Sentinel that “it looks like a lot more people have been bidding — not winning, but bidding.” [Orlando Sentinel] — Mike Seemuth