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Bradford & Bingley securisation a scottish angle


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http://www.investis.com/bbg/pdfstorage/mort0405a.pdf

 

specially for seahorse

 

suggest you search the above link to reveal secrets on "assign"

 

then search the 200+ pages for "scot"

 

Set-off risks in relation to FlexAbility Mortgages, Choices Loans, further drawdowns under Buy-to-

Let Loans and delayed cashbacks may adversely affect the funds available to the Issuer to repay the

Notes

As described in – There may be risks associated with the fact that the Mortgages Trustee has no legal title to the Loans and their Related Security, which may adversely affect payments on the Notes, the

Seller will make, and in the future may make, an equitable assignment of the Loans and their Related

Security or in the case of Scottish Loans, a transfer of the beneficial interest in the Loans and their Related Security, to the Mortgages Trustee, with legal title being retained by the Seller or, as

applicable, the relevant Originator. Therefore, the rights of the Mortgages Trustee may be subject to the direct rights of the Borrowers against the Seller or, as applicable, the relevant Originator, including rights of set-off existing prior to notification to the Borrowers of the sale of the Loans. Setoff rights (including analogous rights in Scotland) may occur if, for example, the Seller or, as applicable, the relevant Originator fails to advance to a Borrower a drawing under a FlexAbility

Mortgage, a Buy-to-Let Loan or a Choices Loan when the Borrower is entitled to draw additional

amounts under a FlexAbility Mortgage, a Buy-to-Let Loan or a Choices Loan or if the Seller or, as

applicable, the relevant Originator fails to pay to a Borrower any delayed cashback which the Seller

or, as applicable, the relevant Originator had agreed to pay to that Borrower after completion of the

relevant Loan. You should note, however, that the Seller and Mortgage Express do not currently offer

delayed cashbacks, but either of them or any other Originator may offer products in the future with

those features and those loans may be assigned to the Mortgages Trustee.

If the Seller or, as applicable, the relevant Originator fails to advance the drawing or pay the delayed

cashback, then the relevant Borrower may set off any damages claim (or analogous rights in Scotland)

arising from the Seller’s or, as applicable, the relevant Originator’s breach of contract against the

Seller’s or relevant Originator’s (and, as assignee or holder of the beneficial interest in the Loans and

their Related Security, the Mortgages Trustee’s) claim for payment of principal and/or interest under

the Loan as and when it becomes due. These set-off claims will constitute transaction set-off as

described in the immediately preceding risk factor.

The amount of the claim in respect of a drawing will, in many cases, be the cost to the Borrower of

finding an alternative source of finance (although in the case of FlexAbility Mortgages, Buy-to-Let

Loans or Choices Loans which are governed by Scottish law, it is possible, though regarded as

unlikely, that the Borrower’s rights of set-off could extend to the full amount of the additional

drawing). The Borrower may obtain a loan elsewhere, in which case the damages would be equal to

any difference in the borrowing costs together with any consequential losses, namely the associated

costs of obtaining alternative funds (for example, legal fees and survey fees). If the Borrower is unable

40

to obtain an alternative loan, he or she may have a claim in respect of other losses arising from the

Seller’s or, as applicable, the relevant Originator’s breach of contract where there are special

circumstances communicated by the Borrower to the Seller or, as applicable, the relevant Originator at

the time the mortgage was taken out or which otherwise were reasonably foreseeable.

In respect of a delayed cashback, the claim is likely to be in an amount equal to the amount due

under the delayed cashback together with interest and expenses and consequential losses (if any).

A Borrower is entitled to set off the full amount of any failed drawing or failed cashback. A

Borrower may also attempt to set off against his or her mortgage payments an amount greater than

the amount of his or her damages claim (or analogous rights in Scotland). In that case, the Servicer

will be entitled to take enforcement proceedings against the Borrower, although the period of nonpayment

by the Borrower is likely to continue until a judgment is obtained.

The exercise of set-off rights by Borrowers would reduce the incoming cashflow to the Mortgages

Trustee during the exercise. However, the amounts set off will be applied to reduce the Seller Share of

the Trust Property only.

Further, there may be circumstances in which:

* a Borrower might seek to argue that any Loan or Extension Advance is wholly or partly

unenforceable by virtue of non-compliance with the CCA; or

* certain drawings may rank behind liens created by a Borrower after the date upon which the

Borrower entered into its mortgage with the Seller.

=================

 

http://www.investis.com/bbg/pdfstorage/mort0405a.pdf

Tam Wing Chuen -v- Bank of Credit and Commerce Hong Kong Ltd [1996] 2 BCLC 69

 

1996

PC

Lord Mustill Commonwealth,

 

Lord Mustill discussed the need to construe a contract contra preferentem: "the basis of the contra proferentem principle is that the person who puts forward the wording of a proposed agreement may be assumed to have looked after his own interests, so that if words leave room for doubt about whether he is intended to have a particular benefit there is reason to suppose that he is not."

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