Hi, I’m Simon and a representative of Chan & Naylor.

We just wanted to provide some clarification from a broking point of view about the issue of finance and properties held in trusts.

Each bank will have a policy on whether they accept a security held in a trust for a loan and these tend to change from time to time. Some lenders accept discretionary trusts and unit trusts but not hybrid trusts, some lenders accept all three and some lenders do not accept any.

Our mortgage broking business regularly lodges loans with the security property held in a hybrid trust to lenders. Often this hybrid trust is the Chan and Naylor Property Investor Trust. We choose to go to the lenders who are familiar with the hybrid trust and have a lending policy that welcomes this structure and find its a non-issue when a lender is approached in the correct way.

That said there are occasions where hybrid trust loans are accepted by a lender in one state and yet declined by the same lender in another. This may be a result of inconsistencies in how internal credit personnel are interpreting policy. ANZ appears to be a case in point right now, although last year it was accepting these structures. Our suggestion is that some further research may be required to find the right lender for this trust mechanism.

Just as a side note – if you are borrowing under then Low Docs lending policy then it is unlikely that you will find a lender for a property loan on any type of trust structure at the moment. This is because of ASIC’s current credit policy resulting from new NCCP regulations rather than lender or accountant specific (who may have set up a particular structure before the GFC and the subsequent ASIC regulation of credit providers).

nnelg – we apologise that your calls have not been returned. If you can send me a private email with your contact details on then I will ensure that someone gets back to you on this matter.