Brexit: EU anti-money-laundering Directives, Special Purpose Vehicles Eurosail and RMBs (SPML- and Preferred- originated mortgages)

Indigo made this Freedom of Information request to Her Majesty's Treasury

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Dear Sir/Madam

In/around January 2009, SPML-originated (Southern Pacific Mortgage Limited) and Preferred-originated (Preferred Mortgages Limited) first-charge mortgages were securitised - converted into Residential Mortgage Backed Securities (RMBs) - and distributed among the Special Purpose Vehicles (SPVs) Eurosail-- created by Lehman Brothers in 2007-2008. Since then mortgage repayments by borrowers have been made to one or other of the SPVs, via a collection account at Barclays Bank. As is explained in the SPV prospectuses (drawn up to comply with EU anti-money-laundering Directives), the mortgage repayments are swept out of the United Kingdom (to another EU country, never to return) every night on the same day the repayments clear out of the borrower's bank. Then, when all the mortgages in any one SPV are redeemed (one way or another), that SPV is wound up.

On present information, Britain leaves the EU in April 2019. On the day Britain leaves the EU, this arrangement - mortgage repayments to the SPVs Eurosail-- by borrowers with SPML-originated (or Preferred-originated) mortgages - being swept out of the United Kingdom to another EU country every day - will be wholly illegal.

My FOI request is for any information about what the Treasury is doing to ensure that mortgage repayments by borrowers with SPML- and Preferred-originated mortgages, made to the SPVs Eurosail-- collection account(s) at Barclays Bank plc, are not used for money-laundering and funding terrorism after Britain leaves the EU. (I have similar concerns about the SPPL-originated second-charge loans, bought by SPML and then securitised to SPVs Eurosail-- .)

At the very least, the prospectuses authored by Lehman Brothers will have to be revised/varied but, at the time of writing, it appears that (a) the Eurosail-- Noteholders have not been alerted to this and (b) the mortgageors have not been warned. I doubt that such a radical variation of this contract with the Eurosail-- Noteholders can be completed by April 2019, and I am worried that the SPVs Eurosail-- will be tempted to look for the "easy" way out: viz, manufacturing reasons for repossessing people's homes before the end of the term of the mortgage ie before the end of March 2019 (too much of that is happening already).

Statement of truth: I believe that the facts stated by me in this FOI request are true.

Yours faithfully
Rachel Mawhood

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Indigo left an annotation ()

The Eurosail prospectuses, authored by Lehman Brothers, are held on the Irish Stock Exchange web site.

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Dear Rachel Mawhood,

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Dear Ms Mawhood


Please find attached HM Treasury's response to your information request.


Yours sincerely


Information Rights Unit | Correspondence and Information Rights Team |
Corporate Centre Group | Floor 3 Red / Yellow | HM Treasury, 1 Horse
Guards Road, London, SW1A 2HQ