AMP what happens to the EOL SMSF loans after a takeover

We have this news in the coming...
Embattled financial company AMP confirms takeover bid from US company

I have SMSF recourse loans, that AMP is saying its End of Life product. They won't barge any rate reductions etc or doing any changes..

What will happen to those loans if AMP is successfully taken over by another company?

 

nothing. the contract remains afoot

 

Most major lenders have terminated their non-recourse SMSF lending product incl CBA, NAB, AMP, St George, Wpac and...AMP. However the product remains for existing owners. Just in hibernation.

It has always been a non-competitive rate and fee product and that wont change as they "grandfather" those loans. Rate reductions due to market forces could occur but in reality they probably wont give any generous reductions and the scope to increase is probably higher than traditional loans. But that shouldnt pose a concern for a while.

Refinancing is an option and if the LVR is low enough that shouldnt pose a concern BUT....the high costs to change will be a turn off. One specific cost would be legals, approval and valuation etc. You probably wont get cost savings elsewhere to offset those transaction costs.

If a SMSF loan encounters difficulties a lender with grandfathered loans probably has little lattitude for managing the risk and may request the trustee considers selling and with limits on refinance this could limit options. Of course actions under a trustee Director providing a guarantee also remain