That you post this tells me you did not understand my post.
I can't make it any clearer than this:
Avoiding creditors, and tax is fraud. Acting as a trustee as per law & trust deed is not.
Though I will restate that most people don't understand what a trust is, and that includes bankers, MBs, and accountants selling trust deeds.
Heck most lawyers ran a mile from it when they studied law and did only the minimum necessary to pass.
And after doing many rounds over the years, it became obvious my good'ole suburban lawyer & accountants know more than those touting flash city slickers.
Fact: You are aware that the bank will not lend to a trust at that level of interest and security. You have either had express or implied notice.
Fact: You apply for a first mortgage over residential property on the basis that you have full legal and equitable title to the property, and it is to be an owner/occupier arrangement ... the highest level of security considered by the bank.
Leaving aside any criminal action, the bank could have an enormous range of equitable remedies.
If the bank suffered a loss, the trustee is personally liable. Also, the trust property and even the beneficiaries are liable if they knew or approved.
Also, given that the loan was conditional on a purpose ... the bank might apply to court to declare a constructive trust over the property purchased with the money.
This means that the entire property including income and capital gains is held on trust for the bank ... much more valuable than a mere mortgage if the property has gone up in value. Painful as well when you have to disgorge all profits made.
A trust is an instrument of equity (conscience), I find it interesting that you think it can be used as a cloak to receive an advantage at somebody else's expense (an equitable fraud).
I believe you are confusing the situation with a bare trust used to acquire assets whilst hiding the true purchasers identity ... but *NOT* to deceive for an advantage.
Get some serious legal advice before proceeding, I am sure you have not yet done this.
Cheers,
Rob