MORTGAGES NO.7 PLC - Notice to Holders of Mortgage Backed Floating Rate Notes

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF CLASS A NOTEHOLDERS. IF CLASS A NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IMMEDIATELY.

                              Mortgages No 7 plc                               

                                 (the Issuer)                                  

  (Incorporated in England and Wales with limited liability under Registered   
                                Number 5492092)                                

                                    NOTICE                                     

                  of the holders of those of the outstanding                   

      £438,000,000 Class A2 Mortgage Backed Floating Rate Notes due 2038       

       £36,350,000 Class B Mortgage Backed Floating Rate Notes due 2038.       

       £24,400,000 Class C Mortgage Backed Floating Rate Notes due 2038        

       £11,250,000 Class D Mortgage Backed Floating Rate Notes due 2038        

        £7,500,000 Class E Mortgage Backed Floating Rate Notes due 2038        

        £7,500,000 Class F Mortgage Backed Floating Rate Notes due 2038        

Unless otherwise defined in this Notice, capitalised terms used in this Notice shall have the meanings ascribed to them in the master definitions agreement dated 8 August, 2005 (as supplemented or amended from time to time) between, among others, the Issuer and the Note Trustee (the Master Definitions Agreement ).

NOTICE IS HEREBY GIVEN to the holders of the above Notes that, following recent discussions amongst the relevant transaction parties and their legal counsel, it has been determined that the interpretation of the Reserve Fund Required Amount (the RFRA) currently being applied is ambiguous in respect of the mechanics of calculation of the RFRA and such interpretation does not reflect the original intent of the interpretation. From the Interest Payment Date falling in January 2013, the RFRA will be adjusted down to the quantum of the Reserve Fund at the point in time when the permitted amortisation of that fund ceased in October 2008. The RFRA will not increase above this balance on future Interest Payment Dates.


This Notice is given by

Mortgages No 7 plc

As Issuer

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