Destination Club Financing Leader Ceases New Loans

By: Destination Club News
Date: March 12, 2009

FirstAgain, the industry's leading financier for destination club memberships, marketed themselves under the tagline "A New Day In Lending." That day may be coming to an end as FirstAgain has announced that they will cease new loan originations effective tomorrow and their website will soon be removed.

In a statement to The Veras Group, a FirstAgain representative stated "The deepening credit crisis has left us unable to secure a new warehouse lending facility and we are thus unable to continue funding new loans. Though we will continue to service our existing loan portfolio, we will not accept new loan applications of any kind. We still believe strongly in our business model and we may resume lending down the road should we secure the necessary warehouse facility."

Late in 2008, FirstAgain raised their rates 0.5% to range between 7.99% and 8.99%. Well qualified buyers could secure anywhere between $7,500 and $100,000 towards their destination club purchase using FirstAgain's AnythingLoan. FirstAgain categorized loans made for destination club membership under their Fractional and Timeshare Loan, which included destination clubs, residence clubs, fractional ownerships, and other forms of shared ownership. While they did not keep track of how many loans were made for each, a representative stated that hundreds of loans were made in the Fractional and Timeshare category.

Both High Country Club and Ultimate Escapes offered destination club financing through partnerships with FirstAgain. While hundreds of loans were provided in the Fractional and Timeshare category, the vast majority of destination club memberships are funded with no financing needed. Many of those who do seek financing for their membership do so through preexisting relationships of their own.

While no new loans will be made through FirstAgain for the time being, the ramifications throughout the destination club industry should be minimal. One of the strongest reasons to finance a destination club membership was that it allowed you to maintain your current investments and not be forced to sell assets from your portfolio to fund your membership. With the Dow dropping over 5,000 points since last March, the lure of maintaining current investments has evaporated.