ALBA 2007 – 1 plc - Irish Stock Exchange

No assurance can be given that changes to the 1999 Regulations, if enacted, or changes to guidance on
interest variation terms, if adopted, will not 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.
Non-Status Lending Guidelines for Lenders and Brokers
The OFT issued Non-Status Lending Guidelines for Lenders and Brokers (the "Guidelines") on 18 July
1997 (revised in November 1997). The Guidelines apply to all mortgage loans made to non-standard
borrowers, defined for the purposes of the Guidelines as borrowers with a low or impaired credit rating
or who might otherwise find it difficult to obtain finance from traditional sources on normal terms and
conditions. The Guidelines are therefore applicable to all of the Mortgage Loans.
The actions of any broker or other intermediary involved in marketing the lender's products can
jeopardise the lender's fitness to hold a consumer credit licence, and the Guidelines make clear that
lenders must take all reasonable steps to ensure that such brokers and other intermediaries comply with
the Guidelines and all relevant statutory requirements. This is so even if the lender has no formal or
informal control or influence over the broker.
The Guidelines are not primary or subordinate legislation. As such, they set out certain "principles" to
be applied in the context of the non-standard residential mortgage market. The Guidelines place certain
constraints on lenders in the non-standard residential mortgage market in respect of matters such as
advertisement of mortgage products, selling methods employed by lenders and their brokers,
underwriting, dual interest rates and early redemption payments. See "Regulation of the UK
Residential Mortgage Market".
Mortgage Loans Regulated by the CCA
Currently, a credit agreement is regulated by the CCA where (a) the borrower is or includes an
individual; (b) the amount of "credit" as defined in that Act does not exceed the financial limit, which is
£25,000 for credit agreements made on or after 1 May 1998, or lower amounts for credit agreements
made before that date; and (c) the credit agreement is not an exempt agreement as defined under that
Act.
Any credit agreement intended to be regulated by the FSMA or unregulated might instead be wholly or
partly regulated by the CCA or treated as such because of technical rules on (a) determining whether
any credit under the CCA arises, or whether the financial limit of that Act is exceeded; (b) determining
whether the credit agreement is an exempt agreement under the Act; and (c) changes to credit
agreements.
A credit agreement that is wholly or partly regulated by the CCA or to be treated as such has to comply
with requirements as to licensing of lenders and brokers, documentation and procedures of credit
agreements, and (in so far as will be applicable) pre-contract disclosure. If it does not comply with
those requirements, then to the extent that it is regulated by the CCA or to be treated as such, the credit
agreement is unenforceable against the borrower:
(a)
(b)
(c)
without an order of the OFT, if requirements as to licensing of lenders and brokers are not met;
totally, if the form to be signed by the borrower is not signed by the borrower personally or
omits or misstates a "prescribed term"; or
without a court order in other cases (and in exercising its discretion whether to make the order,
the court would take into account any prejudice suffered by the borrower and any culpability by
the lender).