Bridget's Blog


Timeshare Default -Shows as a Foreclosure!

Timeshare Default -Shows as a Foreclosure!


A borrower recently contacted me about purchasing a home in Maryland.   After discussing her needs, I reviewed her credit.


She has a timeshare owned jointly with her ex that he has not made payments on it since about 4 months after they purchased it (almost 2 years ago).  She was very surprised to find that her credit report is showing the default as a "Foreclosure; Real Estate Mortgage".


 If it is coded on the credit report as a foreclosure, both Fannie Mae and Freddie Mac (conventional financing) view it as they would any other foreclosure.  A foreclosure means that it could be 7 years before being eligible for conventional financing.


Should I buy a timeshare?



Should I Buy A Timeshare?   You may have a place to stay for 2 weeks a year, but you may not be able to buy a home!  The monthly payment and maintenance fees are counted in your debt ratio.  Default (stop making the payments) and it could show as a foreclosure on your credit report, meaning potentially no loan, or a less desireable loan.


FHA to the Rescue!

As of this writing, this will not disqualify her for a new mortgage if she is using FHA financing.  The good news for this borrower is that FHA views this as unpaid consumer debt and not a foreclosure, no matter how it is coded on the credit report.


7 YEARS to wait to buy a first home because buying a timeshare vacation spot?  Is it worth it?   Think twice before buying that timeshare, and certainly before you choose to stop paying on it.  Get all the facts and be sure you make an informed decision. 


Timeshare Default -Shows as a Foreclosure!

Warm Regards,

Bridget McGee  Maryland Mortgage Mama  NMLS# 196068  SWBC Mortgage.   410-960-2061 EHO or


If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure! 

If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest.  Please contact me at 410-960-2061.

Comment balloon 2 commentsBridget "Mortgage Mama" McGee • August 11 2015 04:39PM


Ouch, I've seen this a time or 3 over the years too.  I know people that love their timeshares, but people need to be aware they show up similar to mortgages on credit, and act accordingly.  Good info!

Posted by John Meussner, #MortgageMadeEasy Walnut Creek, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,) almost 5 years ago

I own 2 weeks of a timeshare in St Maarten and it's one of the best things I've ever done.    I paid cash though(it was a resale)! I couldn't imagine financing it. I didn't even know loans were available.


That this is viewed as a foreclosure is pretty harsh. I too see it as consumer  debt, but, I can also understand why it's considered a foreclosure.


Sadly, some of our best lessons in life come with a bit of pain attached. Hopefully you can help your client get into a new home. Good Luck!



Posted by John Ferrier, 20+ yrs as a consultative mortgage professional (Mortgage Network Solutions, LLC) almost 5 years ago