ALBA 2007 – 1 plc - Irish Stock Exchange

and the right of the relevant Borrowers to redeem their Mortgages by repaying the relevant Mortgage
Loan directly to the Seller. These rights may result in the Issuer receiving less monies than anticipated
from the Mortgage Loans.
Until the Issuer obtains legal title to the Mortgage Loans, the sale of the Mortgage Loans will take
effect in equity only. In order for legal title to be transferred to the Issuer, transfers and assignments
would have to be registered or recorded at the Land Registry and notice would have to be given to
Borrowers of the transfer.
General Regulatory Considerations
A general description of the current regulatory environment affecting the UK residential mortgage
market is set out herein under "Regulation of the UK Residential Mortgage Market".
No assurance can be given that any relevant regulatory authority will not in the future take action or
that future adverse regulatory developments will not arise with regard to the mortgage market in the
UK generally, the Seller's particular sector in that market or specifically in relation to the Seller. Any
such action or developments may have a material adverse effect on the Mortgage Loans, the Seller, the
Issuer, the Special Servicer or the Servicer and their respective businesses and operations. In
particular, the cost of compliance with any such regulation, action or requirement may adversely affect
the ability of the Issuer to meet its financial obligations under the Transaction Documents.
Office of Fair Trading and Financial Services Authority
The Office of Fair Trading (the "OFT") is responsible for the issue of licences under the Consumer
Credit Act 1974 (the "CCA") and the related Consumer Credit Regulations promulgated thereunder.
The OFT may review businesses and operations, provide guidelines to follow and take actions when
necessary with regard to the mortgage market in the United Kingdom.
In February 2000, the OFT issued a guidance note (the "Guidance Note") on what the OFT considers
to be "fair" or "unfair" within the Unfair Terms in Consumer Contracts Regulations 1999 (the "1999
Regulations") (see further below) for interest variation terms. The Guidance Note comments on a term
linking an interest rate to an external rate outside the lender's control. It provides that, generally, the
OFT and Consumers' Association will not regard such term as unfair if the lender explains at the outset
how the mortgage interest rate is linked to the external rate and, if the link does not provide for precise
and immediate tracking, the maximum margin of difference, and the time limits within which changes
will be made. It should be noted that the Guidance Note is not legally binding, has been withdrawn
from the OFT website and is currently under review by the OFT and the FSA. Nevertheless it may
remain in effect as the OFT's view and a factor that the FSA may take into account.
A portion of the Mortgage Loans in the Preliminary Completion Mortgage Pool are Bank of England
Repo Rate-Linked Mortgage Loans where the applicable Mortgage Rate is calculated by reference to
the Bank of England repo rate plus a fixed margin expressed as a percentage above the Bank of England
repo rate currently or after the expiry of a period. The other portion of the Mortgage Loans in the
Preliminary Completion Mortgage Pool are LIBOR -Linked Mortgage Loans where the applicable
Mortgage Rate is calculated by reference to LIBOR plus a fixed margin expressed as a percentage
above LIBOR currently or after the expiry of a period. In relation to such Bank of England Repo Rate-
Linked Mortgage Loans and LIBOR-Linked Mortgage Loans, the Special Servicer (as agent for the
mortgagee) will act as a reasonably prudent residential mortgage lender in setting the rate. The Special
Servicer believes that the Mortgage Rate under the Bank of England Repo Rate-Linked Mortgage Loans
and LIBOR-Linked Mortgage Loans will also be fair in accordance with the Guidance Note.