Article 3
1. The description of property specified in this Part of this Schedule is that of residual mortgage debts.
2. In this Part of this Schedule “residual mortgage debts”, in relation to a society, means mortgage debts which arose from lending by the society and the right to be paid which has become vested in a person other than the society.
1. The power to acquire, hold and dispose of residual mortgage debts is restricted to mortgage debts secured on land in the United Kingdom or in any country or territory for the time being designated by order under section 14 (power to make advances secured on land overseas) of the Act.
2. A society may acquire any residual mortgage debt only where the rights of the person referred to in paragraph 2 of Section A above in respect of the land on which that debt is secured (with or without the rights of that person in respect of other security for the debt) are also acquired by the society.
The aggregate value of any residual mortgage debt owed to a society shall, for the purposes of section 20 of the Act, comprise the aggregate of the amounts outstanding in respect of—
(a)the principal of the debt,
(b)the interest on the debt, and
(c)any other sums which the debtor is obliged to pay the society under the terms of any agreement under which the debt was incurred.
1. The description of property specified in this Part of this Schedule is that of mortgage finance rights.
2. In this Part of this Schedule—
(a)“mortgage finance right” means a right derived from the terms of a document or a connected series of documents to receive sums of money from a person who assumes an obligation under those terms to pay them, which terms require the right to receive the principal element of those sums to be secured by, or by security which includes, the primary security,
(b)“issue terms” means those terms,
(c)“issuer” means that person,
(d)“issue time” means the time at which he assumes that obligation,
(e)“participant” means the issuer or a person who guarantees performance by the issuer of that obligation,
(f)“secured right” means—
(i)where the mortgage finance right is one of a class to which the same issue terms relate, the right of each holder of a mortgage finance right within that class, and
(ii)otherwise, the right of the holder of the mortgage finance right,
to receive that principal element,
(g)“primary security” means a mortgage, or assignment by way of security, of rights of a participant as mortgagee under mortgage advances,
(h)“mortgage advances” means advances on security where the security—
(i)comprises or includes relevant land, and
(ii)does not comprise or include other land,
(i)“relevant land” means land in the United Kingdom or in any country or territory for the time being designated by order under Section 14 of the Act, and
(j)“supplementary security” means a mortgage, or assignment by way of security, of assets of a participant which at the issue time are assets which a society has power to acquire by virtue of this Part of this Schedule or regulations in force under section 21 (liquid assets) of the Act.
1. A society may acquire a mortgage finance right only where the issue terms relating to it—
(a)require the secured right to be secured—
(i)by the primary security, or
(ii)by a combination of the primary security and the supplementary security, whether or not additional Security is also used, and
(b)require that, at the issue time, the total amount of principal outstanding on the mortgage advances to which the primary Security relates is to be at least 90 per cent of the total amount of principal to which the secured right relates.
2. The power of a society to acquire, hold or dispose of mortgage finance rights does not of itself include power to acquire, hold or dispose of any mortgage finance right which the society is for the time being empowered to hold by virtue of regulations under section 21 of the Act, but nothing in this paragraph prohibits anything which is within the capacity of a society by virtue of that Section.
The aggregate value of any mortgage finance right held by a society shall, for the purposes of section 20 of the Act, comprise the aggregate of the amounts outstanding in respect of—
(a)the principal sum or sums the right to receive which is comprised in the mortgage finance right,
(b)any interest payable to the Society in respect of the mortgage finance right, and
(c)any other sum which the Society has the right to receive under the issue terms relating to the mortgage finance right.
1. The description of property specified in this Part of this Schedule is that of leasable chattels.
2. In this Part of this Schedule—
(a)“bailment”, in relation to Scotland, means “hire”, and “bail” and “bailee” shall be construed accordingly.
(b)“chattels” means—
(i)in relation to England and Wales and Northern Ireland, all personal chattels other than things in action and money, and
(ii)in relation to Scotland, all corporeal moveables except money,
(c)“facility account” and “facility limit” have the meanings which they respectively bear in the 1987 Order,
(d)“leasable chattels”, in relation to a society, means chattels the property in which is vested in the society which are, or are to be, subject to bailment to an individual in return for periodical payments by that individual under an agreement which may but need not contain provision (or be part of a series of agreements containing provision) for the property in those chattels to become vested in that individual, and
(e)“leasing agreement” means an agreement under the law of England and Wales, Scotland or Northern Ireland for the bailment of leasable chattels.
1. The power of a society conferred by this Part of this Schedule is available only while the society has a qualifying asset holding, but the cessation of its availability does not require the disposal of any property or rights.
2.—(l) A society may, at any time, bail a leasable chattel to an individual only if the price at which the society acquired that chattel was less than x minus y where at that time—
(a)x is—
(i)the limit for the time being in force under section 16(8) (loans to individuals) of the Act, or
(ii)if a mobile home loan to that individual is outstanding as a result of which the amount which may be lent to him under section 16 of the Act is less than that limit, that lesser amount, and
(b)y is the aggregate of—
(i)sums outstanding in respect of loans made by the society under section 16 of the Act to that individual,
(ii)facility limits on any facility account of that individual with the society, and
(iii)the price at which the society acquired any leasable chattel bailed under any other current leasing agreement between the society and that individual.
(2) Joint bailees of a leasable chattel shall be treated, for the purpose of the limit on bailment under this paragraph, as a single individual and the aggregate of the following shall be taken into account in determining the maximum (in respect of the price referred to in subparagraph (1) above) available for any further leasing agreement between the society and them—
(a)sums outstanding in respect of loans made by the society under section l6 of the Act to any one of them;
(b)facility limits on any facility account of any one of them with the society; and
(c)the price at which the society acquired each leasable chattel bailed under any other current leasing agreement between the Society and any one of them.
1. For the purposes of section 20 of the Act the aggregate of the values of all leasable chattels the property in which is vested in a society shall be determined in accordance with subsection (8) of that section.
2. Where, at any time, there are, in respect of any leasable chattels bailed by a society, sums outstanding which bailees are at that time obliged to pay the society under the terms of leasing agreements, there shall be added to the aggregate of the values determined under paragraph 1 above the aggregate of those outstanding sums and the total of those two aggregates shall comprise the amount which, in respect of leasable chattels, will count in accordance with section 20 of the Act towards the limits applicable to class 3 assets under that section.
1. The description of property specified in this Part of this Schedule is that of bridging debts.
2. In this Part of this Schedule—
(a)“bridging statement” means a statement by an individual who is an applicant for a bridging loan to the effect that—
(i)he has a relevant interest in land,
(ii)he is taking steps towards disposal of that relevant interest,
(iii)he reasonably expects to obtain from that disposal a net receipt sum of an amount specified in the bridging statement,
(iv)he is taking steps towards acquisition of a relevant interest in other land,
(v)he is applying for a sum of money specified in the bridging statement to be lent to him under the terms of a bridging loan, which sum is no greater than the net receipt sum referred to in paragraph (iii) above, and
(vi)for the purpose of making a key payment in relation to the acquisition referred to in paragraph (iv) above before he completes the disposal referred to in paragraph (ii) above, he requires that bridging loan to be made to him (or, where he is also applying for an advance secured on land to be made to him in respect of the land referred to in paragraph (iv) above before he completes that disposal, he requires both that bridging loan and that advance to be made to him),
(b)“relevant interest” means—
(i)in relation to land in England and Wales or Northern Ireland, a legal estate, an equitable interest of a description prescribed in an order for the time being in force under section 10(6) (power to advance money on the security of equitable interests) of the Act, or a combination of the two,
(ii)in relation to land in Scotland, ownership, and
(iii)in relation to other land, an interest on which a form of Security may be taken by virtue of an order for the time being in force under section l4 of the Act, and where the land comprises registered land in England and Wales or Northern Ireland disposal of a legal estate in it shall, for the purposes of subparagraph (a)(vi) above, be treated as completed by the delivery of a transfer of that estate by the person disposing of that estate to the person acquiring that estate, notwithstanding that the transferee is not yet registered as proprietor of that estate,
(c)“net receipt sum”, in respect of a disposal of an interest in land, means the price at which it is disposed of less the aggregate of—
(i)the costs incidental to disposal of that interest, and
(ii)the amount of any debt secured on that interest (other than the bridging debt under the bridging loan applied for) together with the costs incidental to the repayment thereof,
(d)“bridging loan” means a loan by a person to whom a bridging statement has been made to the individual who made the bridging statement of a principal sum of money no greater than the sum referred to in subparagraph (a)(v) above on terms requiring that individual to repay that principal sum and any interest outstanding on it at the time when he completes the disposal referred to in subparagraph (a)(ii) above,
(e)“key payment”, in relation to an acquisition of an interest in land, means a payment to be applied towards (or towards the costs incidental to) any one or more of the following:
(i)acquisition of that interest,
(ii)acquisition of chattels on that land,
(iii)removal of chattels to that land,
(iv)repair of that land,
(v)improvement of that land, or
(vi)development of that land,
(f)“chattels” means—
(i)in relation to England and Wales and Northern Ireland, all personal chattels other than things in action and money, and
(ii)in relation to Scotland, all corporeal moveables except money, and
(g)“bridging debt” means the debt owed under a bridging loan.
A society may make a bridging loan or otherwise acquire or hold a bridging debt only where each relevant interest to which it relates is an interest in relation to land in a country or territory where the society has power to make advances secured on land (whether under section 10 (advances secured on land) or section 14 of the Act).
The aggregate value of any bridging debt owed to a society shall, for the purposes of section 20 of the Act, comprise the aggregate of the amounts outstanding in respect of—
(a)the principal sum lent,
(b)any interest on that principal sum, and
(c)any other sums required to be paid to the society under the terms of the bridging loan under which the bridging debt is owed.