Article 7 Attribution and aggregation of mortgage debts of associated bodies
Subject to rules 8 and 9 below, the mortgage debts of an associated body may be attributed to the society to be aggregated to the class 1 or class 2 assets of the society, where the society has obtained certificates—
to the satisfaction of the board of the society, signed by the board of the associated body adequately supported by a report of the auditors of that body that the relevant mortgage debts may be aggregated to the class 1 assets of the society on grounds that—
the making of the relevant advance would be within the present powers of the society to make such advance on the same terms to the borrower; and,
had the society made such an advance when it was made using present powers it would be a class 1 advance within the meaning of sections 10 to 12 of the Act or that the relevant mortgage debts may be aggregated to the class 2 assets of the society on corresponding grounds that the advance would be a class 2 advance; or
to the satisfaction of the board of the society and of the associated body, signed by the board of the original lender to the borrower, adequately supported by a report of the auditors of that lender to the effect that the relevant mortgage debts may be aggregated to the class 1 assets of the society on the same grounds as in (a) above or to the class 2 assets on the corresponding grounds in (a) above; or
to the satisfaction of the board of the society and of the associated body, signed by the board of the original lender to the borrower, adequately supported by a report of the auditors of that lender, for the purposes of aggregating the mortgage debts to which the certificate relates to the Class 1 assets of the society, to the effect that—
it was the lender’s policy to ensure that all borrowers stated in their respective applications that the land to be the subject of the relevant basic security, was for the residential use of the borrower or a dependant of his;
the lender, where aware that the land upon which an advance was secured had ceased to be used by the borrower for his residential use or that of his dependants, had excluded the relevant mortgage debt from the amount of mortgage debt to which the certificate relates;
the amount advanced did not exceed the value of the basic security (after deducting from that value any mortgage debt of the borrower to the lender outstanding under a mortgage of the land);
any advance was made on the terms that any other mortgage was redeemed or postponed to the basic security or that no other mortgage of the land which secures the advance was outstanding in favour of a person other than the lender; and,
that the land is in the United Kingdom; and,
for the purposes of aggregating the amount of mortgage debts to class 2 assets of the society, to the effect that the circumstances in (iii), (iv) and (v) above prevail.