Disney Vacation Development (DVD) is in the business of selling Disney Vacation Club points to new and existing members. However, there are situations when DVD will buy back or otherwise reacquire some of those deeds and points.
Each time this happens, a new deed is filed by DVD with the Orange County Comptroller (OCC). By reviewing records filed with OCC, it is possible to track these re-acquisitions.
As of April 30, 2011, DVD has sold about 30,081 deeds and 4,865,312 Vacation Club points for Bay Lake Tower at Disney's Contemporary Resort (BLT). DVD has also reacquired 148 of those deeds, representing 26,722 points. The majority of points -- 21,025 (78.7%) -- were reacquired due to foreclosures. Foreclosures occur when a DVC member is in default of either their mortgage or their annual maintenance fees.
There are two types of foreclosures: Judicial foreclosures in which Florida's Ninth Circuit Court issues a Certificate of Title and effectively orders that the ownership interest be returned to DVD; and Non-judicial foreclosures in which the DVC member willingly returns their ownership interest to DVD via a Warranty Deed in Lieu of Foreclosure.
The remaining points -- 5,697 (21.3%) -- were reacquired for several reasons, primarily due to errors on the original deed such as how the deed was titled or which Use Year was assigned. Also included in this category were deeds that DVD reacquired when it exercised its Right of First Refusal (ROFR) when a DVC member sold their deed on the secondary market. The 27 deeds in this category were reacquired by DVD at a weighted average price of $106.26.
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Although 26,722 points may sound like a lot of points, it is a relatively small number for a resort the size of the Bay Lake Tower. It represents only 0.55% of the total BLT points sold by DVD. Furthermore, since DVD averages about 4,800 points in sales for BLT every day, it would take DVD less than six days to resell that amount of points.
A closer look at the 148 reacquired deeds shows they ranged in size from 30 points to 567 points. Non-judicial foreclosures averaged 165.5 points per deed, while the judicial foreclosures averaged 185.1 points per deed. The deeds that were reacquired for other reasons averaged the highest at 211.0 points per deed.
As shown in the chart below, the monthly number of reacquired points is trending upward at BLT. From May 2009, when DVD began reacquiring deeds at BLT, to April 2010, DVD reacquired 8,262 points, an average of 688.5 points per month. From May 2010 to April 2011, the number jumped to 18,460 points, an average of 1,538.3 points per month. This increase is not unexpected. It takes awhile for foreclosure proceedings to work their way through the system, and there are more opportunities for members to default on their mortgages or maintenance fees.
Even if Disney Vacation Development reacquires more points at Bay Lake Tower over the next few months, it is likely that BLT will still be sold out before the end of 2011. Including the 26,722 points that have been reacquired, DVD has less than 752,000 points left to sell at BLT. Since BLT's sales have averaged about 145,000 points over the last 10 months, the last points could be sold as early as October 2011.
