DEED OF TRUST

 
THIS DEED OF TRUST (the "Trust") dated [Insert Date], is made by and between:
 
[Insert Name of Borrower] of [Insert Address of Borrower], (the "Borrower")
-AND-
[Insert Name of Lender] of [Insert Address of Lender], (the "Lender")
-AND-
[Insert Name of Trustee] of [Insert Address of Trustee], (the "Trustee")
 
WITNESSETH:
THAT FOR AND IN CONSIDERATION OF the sum lent to the Borrower by the Lender, in the
amount of $[Insert Amount] U.S. Dollars (the "Principal Amount") as evidenced by the
promissory note (the "Note") dated [Insert Date], the receipt of which the Borrower does hereby
acknowledge itself indebted, the Borrower IRREVOCABLY GRANTS, TRANSFERS AND
ASSIGNS to TRUSTEE IN TRUST, WITH POWER OF SALE, the following described real
property (the "Property"), located at [Insert Address of the Property] in the County of [Insert
County], State of [Insert State], with the following legal description:
(Please see the attached Schedule A for the legal description)
TOGETHER WITH all the improvements now or hereafter erected on the Property, and all
easements, appurtenances, and fixtures now or hereafter a part of the Property. All replacements
and additions will also be covered by this Trust.
BORROWER COVENANTS that Borrower is the legal owner of the estate hereby conveyed and
has the right to grant and convey the Property and that the Property is unencumbered, except for
encumbrances of record. Borrower further warrants and will defend generally the title to the
Property against all claims and demands, subject to any encumbrances of record.
To Protect the Security of this Deed of Trust, the parties do hereby agree as follows:
 

TERMS RELATING TO PAYMENT

 

1. PROMISE TO PAY.
The Borrower, for value received, promises to pay to the Lender the Principal Amount, interest
and all fees and costs on the terms outlined in this Trust or in any amendment, extension, or
renewal of the Trust and any additional amounts secured by this Trust on the terms elsewhere
provided for such debts and liabilities.
 

2. INTEREST.
The Borrower agrees to pay the Principal Amount with interest before and after maturity and
before and after default at the rate of [Insert Percentage] percent (the "Interest Rate"). The
Interest Rate will be calculated from the date this Trust begins on [Insert Date] (the "Adjustment
Date") and accrues until the whole of the Principal Amount is paid. The Loan will be repaid on
the following terms:
 
a. The Principal Amount with interest will be repaid in consecutive monthly installments of $
[Insert Amount].
b. The Adjustment Date for this Trust is [Insert Date];
c. The balance, if any, of the Principal Amount and any interest thereon and any other moneys
owed under this Trust will be due and payable on [Insert Date] (the "Maturity Date").
 

3. PAYMENT LOCATION.
The Borrower will make payments to [Insert Address], or at such other place as may be
designated by Lender at a later date.
 

4. FUNDS FOR ESCROW ITEMS.

The Borrower will pay to Lender, on the day periodic payments are due under this Trust, until
the Principal Amount is paid in full, a sum (the "Funds") to provide for payment for: (a) any
taxes, assessments, or other items which can take priority over this Trust as a lien or
encumbrance on the Property; (b) lease payments on the Property, if any; (c) premiums for any
and all insurance, including Mortgage Insurance required by the Lender. These items are called
"Escrow Items."
 
The Borrower must notify the Lender of all amounts to be paid under this Section. If the Lender
requires, the Borrower must provide receipts evidencing such payments to the Lender. If the
Borrower does not make payments on time, the Lender can, at its discretion, make any and all
past due payments for Escrow Items and the Borrower will be obligated to repay the Lender for
any such amount. The Lender may waive the Borrowers obligation to pay the Lender for any and
all Escrow Items at any time by providing written notice to the Borrower. If such waiver occurs,
the Borrower must pay directly, when and where payable, the amounts due for any and all
Escrow Items. If the Borrower is obligated to pay Escrow Items directly, and the Borrower fails
to make payments on time, then the Lender may exercise its rights under this Section and pay for
any such amounts and Borrower will be obligated to repay Lender for any such amount.
 
The Borrower will collect and hold the Funds in accordance with the Real Estate Settlement
Procedures Act (the "RESPA"). Lender will estimate the amount of Funds due in accordance
with Applicable Law. If there is a surplus of Funds held in escrow, as defined under RESPA, the
Lender must provide to Borrower the excess funds in accordance with RESPA. If there is a
shortage or deficiency of Funds held in escrow, as defined under RESPA, Lender must notify
Borrower in writing and Borrower must pay to Lender the amount necessary to make up the
shortage or deficiency.
 
Upon payment in full of all Funds relating to Escrow Items, Lender will promptly refund to
Borrower any excess Funds held by Lender.
 

5. OBLIGATION TO PAY.
The Borrower agrees to pay all moneys payable pursuant to this Trust and all additional amounts
secured by this Trust without abatement, set-off or counterclaim. Should the Borrower make any
claim against the Lender either initially or by way of abatement, set-off or counterclaim, the
Borrower agrees that any such claim will not reduce or postpone their obligation to make all
payments as provided by this Trust.
 

6. APPLICATION OF PAYMENTS.
All payments paid by the Borrower and received by the Lender will first be applied in payment
of the interest calculated at the Interest Rate, and second in payment of the Principal Amount.
Such payments will be applied in the order in which it became due. However, if the Borrower
defaults on payment, then the Lender will have the right to apply any payments received while in
default as the Lender so chooses.
 

7. PREPAYMENT PRIVILEGES.
When not in default, the Borrower may prepay, without penalty, all or a portion of the Principal
Amount and Interest earlier than it is due (i.e., make payment prior to the time that it is due).
Partial prepayment will not postpone the due date of any subsequent payment or change the
payment amount, unless the Lender otherwise agrees in writing. Rather, prepayments will first be
applied to the interest calculated at the Interest Rate, and second to the Principal Amount.
 
8. ADDITIONAL CHARGES AND ENCUMBRANCES.
The Borrower must pay all taxes, assessments, charges, fines, and all other impositions
attributable to the Property and all trusts, liens, and other encumbrances on the Property. To the
extent that these items are Escrow Items, the Borrower will pay them in the manner provided in
Section 4.
 

9. RELEASE AND RECONVEYANCE.

Upon payment of all sums secured by this Trust, including the Principal Amount and interest, the
Lender will request the Trustee to reconvey the Property and must surrender this Trust and the
Note evidencing debt secured by this Trust to Trustee. Trustee must reconvey the Property
without warranty to the person or persons legally entitled to it. Such person or persons will pay
any recordation costs. The Lender may charge such person or persons a fee for reconveying the
Property, but only if the fee is paid to a third party (such as the Trustee) for services rendered and
the charging of the fee is permitted under Applicable Law.
 

10. NO SALE WITHOUT CONSENT.

The Trustee will not sell, transfer, assign, or otherwise dispose of all or part of the Property or
any interest in the Property, without the Borrower's and Lender's prior written consent.
 

11. PROPERTY INSURANCE.

The Borrower must keep the improvements now existing or hereafter erected on the Property
insured against loss by fire, hazards included within the term "extended coverage," and any other
hazards including, but not limited to, earthquakes and floods, for which the Lender requires
insurance. The insurance carrier providing the insurance will be chosen by the Borrower.
However, the Lender will have the right to disapprove the Borrower's choice, which right may
not be unreasonable.
 
If the Borrower fails to maintain any of the coverage's described above, then Lender may obtain
insurance coverage, at Lender's discretion and Borrower's expense. Borrower acknowledges that
the cost of the insurance coverage so obtained might significantly exceed the cost of the
insurance that the Borrower could have obtained. However, any amounts paid by Lender will
become additional debt of the Borrower and secured by this Trust. The amounts paid by the
Lender will bear interest at the Interest Rate from the date of payment and will be payable, with
such interest, upon notice from Lender to Borrower requesting payment.
 
All insurance policies must include a standard mortgage and/or trust clause and will name
Lender as mortgagee and/or as an additional loss payee, stating that any loss is payable to the
Lender. Borrower further agrees to generally assign rights to insurance proceeds to the Lender up
to the amount of the outstanding loan balance. If, at the request of the Lender, Borrower will
provide Lender (a) a copy of the insurance policy; (b) all receipts of paid premiums and renewal
notices.
 
In the event of loss, the Borrower must give prompt notice to the insurance carrier and to the
Lender. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds must be
applied to restoration or repair of the Property, if the restoration or repair is economically
feasible. If the restoration or repair is not economically feasible, the insurance proceeds will be
applied to the remainder of this Trust, whether or not the balance of the Trust is then due, with
the excess, if any, paid to the Borrower.
 

12. OCCUPANCY, MAINTENANCE, AND REPAIR.

The Borrower will occupy, establish, and use the Property as Borrower's principal residence after
the execution of this Trust. The Borrower will not allow the Property to become vacant without
the written consent of the Lender. The Borrower will not destroy, damage or impair the Property,
allow the Property to deteriorate or commit waste on the Property. Whether or not the Borrower
is residing at the Property, the Borrower will maintain the Property in order to prevent the
Property from deteriorating or decreasing value due to its condition. Unless repair or restoration
is not economically feasible, Borrower will promptly make all necessary repairs, replacements,
and improvements to avoid any further deterioration or damage. The Lender may, whenever
necessary, make reasonable entries upon and inspections of the Property. If the Borrower
neglects to maintain the Property in good condition or allows the Property to deteriorate resulting
in decreased property value, the Lender will have the right to make such repairs and
improvements as it considers necessary to maintain the Property.
 

13. HAZARDOUS SUBSTANCES.

The Borrower will not cause or permit the presence, use, disposal, storage, or release of any
hazardous substances on the Property. Hazardous substances include pollutants, wastes, and
those substances defined as toxic or hazardous substances by environmental law, as well as the
following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic
pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and
radioactive materials. Furthermore, the Borrower will not, nor allow anyone else to do, anything
affecting the Property involving any hazardous substances that would materially affect the value
of the Property. The Borrower will promptly take all necessary remedial actions under federal,
state, and local laws regarding hazardous substances.
 
 

DEFAULT AND REMEDIES

 

14. DEFAULT.
The Borrower will be considered in default under the terms of this Trust if any of the following
conditions are met:
a. The Borrower fails to pay the sum of the Principal Amount, interest, or any other amounts due
under this Trust.
b. The Borrower fails to perform or comply with any of the terms and conditions or any
obligations or responsibilities due under this Trust.
c. The Borrower has given or made, at any time during the loan process, any materially false,
misleading, or inaccurate information or statements to the Lender or any other party under this
Trust in connection with the loan.
d. If any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment,
could result in forfeiture of the Property or other material impairment of Lender's interest in the
Property or rights under this Trust.
e. If a lien is registered against the Property, or if default occurs under any other lien or
encumbrance existing against the Property;
f. The Borrower abandons or fails to occupy the Property.
g. The Property or any material part of the Property is expropriated.
 

15. ACCELERATION.
If at any time the Borrower should be in default under this Trust, the Lender must give notice to
the Borrower. The notice must specify: (a) the default; (b) the action required to cure the default
(if allowable); (c) a date, not less than 30 days from the date of the notice, by which the default
must be cured; and (d) that failure to cure the default on or before the date specified in the notice
may result in acceleration of the sums secured by this Trust and sale of the Property. If the
default is not curable and/or if the default is not cured on or before the date specified in the
notice, the Lender at its option may require immediate payment in full of all sums, including the
Principal Amount, interest, and all other amounts secured by this Trust. If the default is cured,
the Trust will be reinstated. If the default is not cured, the Lender may invoke the power of sale
and begin foreclosure proceedings.
 
The Lender will at all times retain the right to require immediate payment in full in the event of
default. Any forbearance on the part of the Lender upon default, which includes but is not limited
to acceptance of late payment, acceptance of payment from third parties, or acceptance of
payments less than the amount due, will not constitute a waiver to enforce acceleration on
default.
 

16. PROTECTION OF LENDER'S INTEREST.

If at any time the Borrower fails to perform the covenants and agreements under this Trust, or if
there is a legal proceeding that significantly affects the Lender's interest in the Property, or if the
Borrower has abandoned the Property, then the Lender may do and pay for whatever is
reasonable or appropriate to protect the Lender's interest in the Property and/or rights under this
Trust, which includes, but is not limited to:
 
a. Paying any sums secured by a lien which has priority over this Trust;
b. Appearing in court;
c. Paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this
Trust; and
d. Paying for reasonable costs to repair and maintain the Property.
The Lender will at all times retain the right to take action under this Section. However, the
Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that
the Lender will not incur any liability for not taking any or all actions to perform such tasks.
Furthermore, any amounts paid by the Lender will become additional debt of the Borrower
secured by this Trust.
 

17. POWER OF SALE.

If at any time the Borrower is in default under this Trust, the Lender will have the right and
authority to foreclose and force the sale of the Property without any judicial proceeding. Any
delay in the exercising of this right will not constitute a waiver to exercise this right at a later
date should the Borrower remain in default or subsequently default again in the future.
 

18. REMEDIES.
The Lender will have the right to invoke all remedies permitted under Applicable Law, whether
or not such remedies are expressly granted in this Trust, including but not limited to any
foreclosure proceedings.
 
If the Lender invokes the power of sale, the Trustee will execute a written notice of the
occurrence of an event of default and of the Lender's decision to sell the Property. The Lender or
Trustee will mail copies of the notice to the Borrower and Guarantor and will also give public
notice of sale in the manner provided by Applicable Law. After the time required by Applicable
Law, the Trustee will sell the Property at a public auction to the highest bidder at the time and
place and under the terms designated by the Trustee in the notice of sale. The Trustee may
postpone sale of the Property by public announcement at the time and place of any previously
scheduled sale. Furthermore, the Lender or its designee may purchase the Property at any sale.
 
 

MISCELLANEOUS TERMS
 

19. GOVERNING LAW.

This Trust will be construed in accordance with the laws of the state of [Insert State]
("Applicable Law"). Applicable Law will include all controlling applicable federal, state and
local statutes. All rights and obligations under this Trust are subject to any requirements and
limitations of Applicable Law.
 

20. SEVERABILITY.
If any portion of this Trust will be held to be invalid or unenforceable for any reason, the
remaining provisions will continue to be valid and enforceable. If a court finds that any provision
of this Trust is invalid or unenforceable, but that by limiting such provision it would become
valid and enforceable, then such provision will be deemed to be written, construed, and enforced
as so limited.
 

21. JOINT SIGNATURES.

If the Borrower is more than one person or legal entity, each Borrower who signs this Trust will
be jointly and severally bound to comply with all the obligations and liabilities of the other
Borrower(s).
 

22. STATUTORY PROVISIONS.

The provisions contained in this Trust are additional and supplemental, to the extent permitted by
law, to the provisions set out in the Applicable Law as they relate to trusts.
 

23. SUBSTITUTE TRUSTEE.

The Lender may, at its option, from time to time appoint a successor Trustee by an instrument
executed and acknowledged by Lender and recorded in the office of the Recorder of the county
in which the property is located. The instrument will contain the name of the original Lender,
Trustee, and Borrower, the book and page where this Trust is recorded and the name and address
if the successor Trustee. Without conveyance of the Property, the successor trustee will succeed
to all the title, powers and duties of the Trustee.
 

24. NOTICE.
All notice given by either party in connection with this Trust must be in writing. Notice will be
considered sufficient when mailed by first class or certified mail to the address of the recipient.
The recipient's address will be the property address as stated under this Trust unless another
address has been designated. If there is a change of address by any party, that party must
promptly notify all parties under this Trust of the change of address. Any notice will be
considered effective on the same day that it was sent, unless the day falls on a national holiday,
Saturday, or Sunday, in which case, the next business day will be considered as the day of
receipt.
 
 
IN WITNESS WHEREOF this Trust has been executed by the Borrower in the manner
prescribed by law as of [Insert Date] as stated above.
 
 
Borrower:
 
By: ___________________________________ Date: __________________
 
 
 SCHEDULE A
LEGAL DESCRIPTION OF REAL PROPERTY