15 Aug 2016

Cross securitising even in trusts

Regarding the nine houses and nine banks, if you’ve got each of those investment properties in their own trust then how can they cross securitise between two different entities?

They can. You are the guarantor as you’re guaranteeing this one, you’re guaranteeing that one, and you’re the same person.

You’ve got to remember with banks, essentially the trust like the family law court is a completely see through vehicle. You are standing behind what’s going on. It goes between banks, but no, in the same bank they have the ability to move up to you.

It’s just a risk assessment. You’ve got to have some level of risk or some level of exposure to each bank. You’ve just got to control what that is.

Having nine properties in nine different banks, although it might be very safe, it becomes a management nightmare just trying to work the logistics of organising it. It’s about controlling the circumstances.

You might say you don’t want more than three quarters of a million dollars or half a million dollars with any bank and just control it that way.

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