CBA lends to Hybrid Trusts again YAY

good to see some common sense positioning

ta
rolf


We now accept Hybrid Trusts
We are enhancing the Bank?s offering by expanding the customer eligibility criteria to include Hybrid Trusts as an eligible borrower and guarantor.
 
Who was accepting them Rolf, WBC, St George, RAMS etc?

Succesin getting them approved doesnt mean they are accepted as policy: )

STG, NAB, Suncorp, and a smattering if lucky ones such as AMP, ING even though they have specific exclusions.

CBA NEVER did them,they had policy exclusions, so quite surprising butgreat news for the 1000s that have these tools

ta
rolf
 
It's a very interesting turn of events indeed, given they've never entertained HDTs before and almost every other lender is nervous about them. It'll be interesting to find out why they changed their position.
 
Most likely Collin, but there's much easier and less risky ways for them to achieve that. The lending manager in my local branch doesn't have a clue about discretionary trusts let alone hybrids.
 
I noticed that last week when I was looking at their policy online. Had to do a double take.

I suspect Can and Naylor's recent ruling and their lobbying perhaps?
 
I can only speak on my own behalf but I would imagine that HT's would represent a very small market and hence very unlikely to be a market share play.

Personally I would love to see CBA enter the 4 unit on a single title (construction) market. We just don't have enough lenders doing this and it would be great to have more options in this space.
 
It is a small portion of the market admitidly.

More 4 unit resi lenders would be fantastic.

I was chatting to a local WA bank BDM who have recently scaled back from 4 units to 3 (at end value) and I asked the reason why?

Her response was an intervention from APRA in reference to 4 units being deemed a commercial venture.
 
I doubt that APRA would fiddle in this sort of minimalist space.

more like lenders not being realistic with their information I expect

I had thoughts along those lines Rolf.

I think it would have more to do with the loan book being overweight in that space as one particular suburb in Perth is practically owned by said bank!

Was confirmed the very next day by the BWA BDM that it was biz as usual on their current 4 on one title policy sub 80%.

I would really like to believe everything I here from banks but...............:rolleyes:
 
I noticed that last week when I was looking at their policy online. Had to do a double take.

I suspect Can and Naylor's recent ruling and their lobbying perhaps?

Obtaining a ruling on a trust deed is one thing. Its a very different thing to vary all the past issues for every trust previously established. And get a private ruling that confirms it worked both before and after. ATO love to ignore those requests until they are already done and are a reality. That's risky. Even then the problem with a HDT is in how:
- Units are redeemed and issued
- Valuation basis for units....
- Disc / Unitholders each have a fixed entitlement to income + capital

Its very easy to breach the "benefits others" issue in the ATO determination on hybrid trusts. For example redemption of units may result in the trust income being on discretionary objects.

Its never been addressed but I have always wondered if the approach to hybrids should be different and how the ATO might approach it. For example, if the settled sum is initially $300 and the units $100. Then this later changes the proportion of discretionary objects v's fixed objects...eg a return of capital $200 to disc beneficiaries through a partial vesting. Then those persons apply for more units so that the discretionary objects are $100 and unit entitlement is $300....All deeds seem to use the units to change this entitlement ....I have never seen an attempt at the inverse through the trust vesting some of the capital settled to beneficiaries who use the $$ to buys units with a fixed entitlement to income.

The rulings I have seen for a HDT literally requires no changes or Part IVA can apply. Yet changes to the trust are what is contemplated.

With my extensive experience in HDTs & HUTs there aren't too many instances when I would ever touch such a trust personally. That doesn't mean all are evil. There are actually some very good instances when hybrids are brilliant.
 
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