California Deed of Trust with Assignment of Rents

DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING

State of California

RECORDING INFORMATION

RECORDING REQUESTED BY:
[________________________________]

WHEN RECORDED MAIL TO:
Name: [________________________________]
Address: [________________________________]
City/State/Zip: [________________________________]

MAIL TAX STATEMENTS TO:
Name: [________________________________]
Address: [________________________________]
City/State/Zip: [________________________________]

SPACE ABOVE THIS LINE FOR RECORDER'S USE

Document Transfer Tax: $[________________________________]
☐ Computed on full value of property conveyed
☐ Computed on full value less liens and encumbrances remaining at time of sale
☐ Exempt from transfer tax — Reason: [________________________________]

Assessor's Parcel Number (APN): [________________________________]

Loan Number: [________________________________]

DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING

Date of Execution: [__/__/____]

PARTIES

TRUSTOR (Borrower):
Name(s): [________________________________]
Address: [________________________________]
City/State/Zip: [________________________________]
☐ Individual(s) ☐ Married Couple ☐ Domestic Partners ☐ Trust ☐ Corporation ☐ LLC ☐ Partnership ☐ Other: [____]

TRUSTEE:
Name: [________________________________]
Address: [________________________________]
City/State/Zip: [________________________________]
California License/Qualification: [________________________________]

BENEFICIARY (Lender):
Name: [________________________________]
Address: [________________________________]
City/State/Zip: [________________________________]
☐ Individual ☐ Bank/Financial Institution ☐ Credit Union ☐ Mortgage Company ☐ Seller (Purchase Money) ☐ Other: [____]

Property Address: [________________________________], California [____]

ARTICLE I — GRANT IN TRUST AND PROPERTY DESCRIPTION

Section 1.1 — Grant in Trust

Trustor hereby irrevocably GRANTS, TRANSFERS, AND ASSIGNS to Trustee, IN TRUST, WITH POWER OF SALE, all of Trustor's right, title, and interest in and to the following described real property located in the County of [________________________________], State of California:

SEE EXHIBIT A ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE

(the "Property")

Section 1.2 — Property Conveyed

Together with all of the following (collectively, the "Security"):

(a) All buildings, structures, improvements, and fixtures now existing or hereafter erected on the Property, including all replacements and additions;
(b) All easements, rights-of-way, strips and gores of land, streets, ways, alleys, passages, sewer rights, water rights, water courses, water stock, and appurtenances pertaining to the Property;
(c) All right, title, and interest of Trustor in and to any land lying within the right-of-way of any street, road, or avenue abutting the Property;
(d) All rents, issues, profits, revenue, royalties, and income of the Property, subject to the right of Trustor to collect the same as provided herein;
(e) All estate, right, title, interest, property, claim, and demand of Trustor in and to the Property, both in law and in equity;
(f) All proceeds of insurance, condemnation, or eminent domain awards, and other conversions of the Property;
(g) All equipment, appliances, fixtures, machinery, and other articles of personal property now or hereafter attached to, placed upon, or used in connection with the Property;
(h) All mineral, oil, gas, and other hydrocarbon rights in or to the Property;
(i) All leases, subleases, licenses, and occupancy agreements now or hereafter affecting the Property;
(j) All accounts, general intangibles, instruments, and documents arising from or related to the Property.

Section 1.3 — Security Interest

This Deed of Trust constitutes both a real property deed of trust and a security agreement under the California Commercial Code. Trustor hereby grants Beneficiary a security interest in all personal property described herein and in all proceeds thereof.

Section 1.4 — Fixture Filing

This Deed of Trust shall serve as a fixture filing under California Commercial Code § 9502(c) for all items that are or may become fixtures attached to the Property.

ARTICLE II — OBLIGATIONS SECURED

Section 2.1 — Secured Indebtedness

This Deed of Trust secures the following obligations (the "Secured Obligations"):

(a) Promissory Note. Payment of the indebtedness evidenced by that certain Promissory Note of even date herewith in the original principal amount of [________________________________] DOLLARS ($[________________________________]) (the "Note"), executed by Trustor in favor of Beneficiary, bearing interest at the rate of [____]% per annum (☐ fixed / ☐ adjustable), with a maturity date of [__/__/____];

(b) Additional Advances. Payment of all additional sums, with interest thereon, advanced by Beneficiary to protect the security of this Deed of Trust, including but not limited to advances for taxes, assessments, insurance premiums, and maintenance of the Property;

(c) Future Advances. Payment of all future advances made by Beneficiary to Trustor, whether obligatory or optional, up to a maximum amount of $[________________________________], pursuant to Cal. Civ. Code § 2884;

(d) Costs and Expenses. Payment of all costs, fees, and expenses incurred by Beneficiary or Trustee in enforcing this Deed of Trust, including reasonable attorney fees;

(e) Performance of Covenants. Performance and observance of all covenants, agreements, and obligations of Trustor contained in this Deed of Trust, the Note, and all related loan documents.

Section 2.2 — Loan Terms Summary

ARTICLE III — TRUSTEE PROVISIONS

Section 3.1 — Trustee Qualifications

The Trustee named herein is qualified to serve as trustee pursuant to California Civil Code § 2934a and accepts this trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.

Section 3.2 — Trustee's Powers and Duties

Trustee shall have the power and duty to:
(a) Record this Deed of Trust and any substitution of trustee instruments;
(b) Execute and record a full reconveyance upon satisfaction of the Secured Obligations;
(c) Upon default by Trustor and at the direction of Beneficiary, commence and complete non-judicial foreclosure proceedings;
(d) Execute a trustee's deed upon sale to the purchaser at any foreclosure sale;
(e) Perform all other acts required by law or directed by Beneficiary in accordance with this Deed of Trust.

Trustee is not obligated to notify any party hereto of a pending sale under any other deed of trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party, unless brought by Trustee or unless Trustee is required to be notified under applicable law.

Section 3.3 — Substitution of Trustee

Beneficiary may, from time to time, by a recorded instrument executed and acknowledged by Beneficiary, substitute a successor or successors to any Trustee named herein or acting hereunder. Such instrument shall be conclusive proof of proper substitution under California Civil Code § 2934a. The successor Trustee shall, without conveyance from the predecessor Trustee, succeed to all title, estate, rights, powers, and duties of the predecessor.

Section 3.4 — Trustee's Fees and Indemnification

Trustor shall pay all reasonable fees and costs of Trustee for services rendered hereunder, including but not limited to fees for reconveyance, foreclosure proceedings, title searches, and recording fees. Trustor shall indemnify and hold Trustee harmless from all claims, costs, and liabilities arising from Trustee's performance of duties hereunder, except for Trustee's gross negligence or willful misconduct.

ARTICLE IV — COVENANTS OF TRUSTOR

Trustor covenants and agrees as follows:

Section 4.1 — Payment of Secured Obligations

Trustor shall promptly pay when due the principal and interest on the indebtedness evidenced by the Note, all prepayment and late charges as provided in the Note, and all other sums secured by this Deed of Trust.

Section 4.2 — Taxes, Assessments, and Charges

(a) Trustor shall pay, before delinquency, all taxes, assessments, charges, fines, and impositions attributable to the Property, including assessments on water stock and all other charges against the Property, and shall promptly deliver to Beneficiary the receipts of payment.

(b) If Beneficiary requires an escrow/impound account, Trustor shall pay to Beneficiary on each payment date under the Note an amount estimated by Beneficiary to be sufficient to pay all taxes, assessments, and insurance premiums when due.

(c) Trustor shall not claim any deduction from the value of the Property for assessment or taxation purposes.

Section 4.3 — Insurance Requirements

(a) Hazard Insurance. Trustor shall keep the improvements on the Property insured against loss by fire, flood (if in a flood zone), earthquake (if required by Beneficiary), and other hazards as Beneficiary may require, for at least the lesser of: (i) the full replacement cost of the improvements; or (ii) the outstanding balance of the Secured Obligations. All policies shall name Beneficiary as loss payee and mortgagee.

(b) Liability Insurance. Trustor shall maintain comprehensive general liability insurance in amounts acceptable to Beneficiary, naming Beneficiary as an additional insured.

(c) Policy Requirements. All insurance policies and renewals shall be in a form acceptable to Beneficiary and shall provide for at least thirty (30) days' written notice to Beneficiary before cancellation or material change. Trustor shall promptly deliver to Beneficiary all renewal policies and receipts of payment.

(d) Application of Insurance Proceeds. In the event of loss, Beneficiary may apply insurance proceeds to restoration of the Property or to reduction of the Secured Obligations, in Beneficiary's sole discretion, unless applicable law provides otherwise.

Section 4.4 — Maintenance and Preservation of Property

(a) Trustor shall keep the Property in good condition and repair and shall not commit waste or permit impairment or deterioration of the Property.

(b) Trustor shall not remove, demolish, or substantially alter any building or improvement on the Property without the prior written consent of Beneficiary.

(c) Trustor shall complete promptly and in a good and workmanlike manner any building, structure, or improvement being constructed on the Property and shall restore promptly any building, structure, or improvement that may be damaged or destroyed.

(d) Trustor shall comply with all conditions and requirements of any governmental authority having jurisdiction over the Property.

Section 4.5 — Protection of Beneficiary's Security

(a) Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof, the rights or powers of Beneficiary or Trustee, or the title to the Property.

(b) If Trustor fails to perform any covenant or agreement contained herein, or if any action or proceeding is commenced that affects Beneficiary's interest in the Property, Beneficiary may, at Beneficiary's option, make such appearances, disburse such sums, and take such actions as Beneficiary deems necessary to protect Beneficiary's interest. Any amounts disbursed by Beneficiary shall become additional indebtedness secured by this Deed of Trust, shall bear interest at the rate specified in the Note, and shall be payable upon notice from Beneficiary.

Section 4.6 — Compliance with Laws

Trustor shall comply with all laws, ordinances, regulations, restrictive covenants, conditions, and restrictions of record affecting the Property, including without limitation zoning ordinances, building codes, health and safety regulations, and environmental laws.

Section 4.7 — Inspection

Trustor shall permit Beneficiary, its agents, and representatives to enter upon and inspect the Property at reasonable times and upon reasonable notice (except in the case of emergency, in which case no notice is required).

Section 4.8 — No Further Encumbrances

Except as expressly permitted by Beneficiary in writing, Trustor shall not create, place, or permit to exist any lien, encumbrance, charge, or claim against the Property other than: (a) this Deed of Trust; (b) liens for taxes and assessments not yet delinquent; and (c) encumbrances of record approved by Beneficiary.

Section 4.9 — Condemnation

In the event of condemnation or taking of all or any part of the Property by eminent domain, the entire amount of the award or compensation shall be paid to Beneficiary to be applied to the Secured Obligations in such order as Beneficiary may determine, with any excess paid to Trustor.

ARTICLE V — ASSIGNMENT OF RENTS

Section 5.1 — Absolute Assignment

As additional security for the Secured Obligations, Trustor hereby absolutely and unconditionally assigns to Beneficiary all rents, issues, profits, revenue, and income of the Property, whether now due, past due, or to become due (the "Rents").

Section 5.2 — License to Collect

Beneficiary hereby confers upon Trustor a revocable license to collect and retain the Rents as they become due and payable, prior to any Event of Default hereunder. Upon the occurrence of an Event of Default, Beneficiary may revoke such license without notice and may, at Beneficiary's option:

(a) Enter upon and take possession of the Property, or any part thereof;
(b) Collect the Rents directly from tenants and occupants;
(c) Apply for appointment of a receiver to collect Rents;
(d) Apply collected Rents to the Secured Obligations in such order as Beneficiary may determine.

Section 5.3 — Tenant Notification

Upon revocation of Trustor's license, Beneficiary may notify any tenant or occupant of the Property to pay Rents directly to Beneficiary. Each tenant or occupant is hereby authorized and directed to comply with any such demand without inquiry as to whether an Event of Default has occurred.

ARTICLE VI — DUE-ON-SALE / TRANSFER CLAUSE

Section 6.1 — Acceleration Upon Transfer

If all or any part of the Property, or any interest therein, is sold, transferred, or conveyed (whether voluntarily or by operation of law) without the prior written consent of Beneficiary, Beneficiary may, at Beneficiary's option, declare all sums secured by this Deed of Trust to be immediately due and payable. This option shall not be exercised if prohibited by applicable law.

Section 6.2 — Exempt Transfers Under Federal Law

Pursuant to 12 U.S.C. § 1701j-3 (Garn-St. Germain Depository Institutions Act), Beneficiary shall not exercise its option to accelerate upon the following transfers, provided such transfer does not involve a transfer of rights of occupancy of the Property:

(a) A transfer by devise, descent, or operation of law upon the death of a joint tenant or tenant by the entirety;
(b) A transfer to a relative resulting from the death of a borrower;
(c) A transfer where the spouse or children of the borrower become an owner of the Property;
(d) A transfer resulting from a decree of dissolution of marriage, legal separation agreement, or incidental property settlement agreement;
(e) A transfer into an inter vivos revocable trust where the borrower is and remains a beneficiary and occupant of the Property;
(f) A creation of a junior lien or encumbrance that does not relate to a transfer of rights of occupancy.

Section 6.3 — Notice and Consent Procedures

(a) Trustor shall notify Beneficiary in writing at least thirty (30) days before any proposed transfer.
(b) Beneficiary may condition consent on: (i) assumption of the Note by the transferee; (ii) a credit review of the transferee; (iii) modification of the interest rate; and/or (iv) payment of a transfer fee not to exceed [____]% of the outstanding principal balance.
(c) Any transfer made without the required consent of Beneficiary shall constitute an Event of Default.

ARTICLE VII — ESCROW AND IMPOUND ACCOUNT

Section 7.1 — Establishment of Escrow Account

☐ Escrow Required. Trustor shall establish and maintain an escrow/impound account with Beneficiary for the payment of taxes, assessments, insurance premiums, and other charges as Beneficiary may require.

☐ Escrow Waived. Beneficiary waives the requirement for an escrow account at this time but reserves the right to require one upon the occurrence of a default.

Section 7.2 — Monthly Deposits

Trustor shall pay to Beneficiary, on each date that monthly payments are due under the Note, an amount equal to one-twelfth (1/12) of the estimated annual taxes, assessments, and insurance premiums, plus such additional amounts as Beneficiary may reasonably estimate for changes in these charges.

Section 7.3 — Application of Escrow Funds

Beneficiary shall apply escrow funds to pay taxes, assessments, and insurance premiums when due, provided sufficient funds are available. If escrow funds are insufficient, Trustor shall pay any deficiency within thirty (30) days of notice from Beneficiary.

Section 7.4 — Escrow Account Analysis

Beneficiary shall provide an annual escrow account analysis to Trustor and shall refund any surplus or adjust the monthly deposit amount as required by applicable law.

ARTICLE VIII — DEFAULT AND REMEDIES

Section 8.1 — Events of Default

The following shall constitute Events of Default under this Deed of Trust:

(a) Failure to make any payment of principal, interest, or other charges when due under the Note or this Deed of Trust, and such failure continues for a period of [____] days after the due date;
(b) Breach of any covenant, agreement, or obligation contained in this Deed of Trust, the Note, or any related loan document;
(c) Any material misrepresentation or fraud by Trustor in connection with the loan or this Deed of Trust;
(d) Transfer of all or any part of the Property in violation of Article VI;
(e) Failure to maintain required insurance coverage on the Property;
(f) Failure to pay taxes, assessments, or other charges when due;
(g) The filing of a voluntary or involuntary petition in bankruptcy by or against Trustor;
(h) Appointment of a receiver, trustee, or custodian for Trustor or any of Trustor's property;
(i) A material adverse change in the condition of the Property, including waste, damage, or destruction;
(j) Any judgment, attachment, or lien filed against the Property that is not discharged within [____] days;
(k) Death of Trustor (if an individual) where no acceptable successor assumes the obligations hereunder.

Section 8.2 — Beneficiary's Remedies

Upon the occurrence and continuance of an Event of Default, Beneficiary may, at its option, pursue one or more of the following remedies:

(a) Acceleration. Declare the entire unpaid principal balance, accrued interest, and all other sums secured hereby immediately due and payable;
(b) Non-Judicial Foreclosure. Direct Trustee to commence non-judicial foreclosure proceedings under California Civil Code §§ 2924-2924k;
(c) Judicial Foreclosure. Commence judicial foreclosure proceedings under California Code of Civil Procedure § 725a et seq.;
(d) Receiver. Apply to a court of competent jurisdiction for appointment of a receiver;
(e) Rents. Exercise rights under the assignment of rents (Article V);
(f) UCC Remedies. Exercise remedies available under the California Commercial Code with respect to any personal property collateral;
(g) Other Remedies. Pursue any other remedy available at law or in equity.

ARTICLE IX — NON-JUDICIAL FORECLOSURE PROCEDURES

Section 9.1 — Notice of Default (Cal. Civ. Code § 2924)

(a) Upon an Event of Default, Beneficiary may cause Trustee to record a Notice of Default and Election to Sell Under Deed of Trust in the Official Records of the county where the Property is located.

(b) The Notice of Default shall:

• (i) Identify this Deed of Trust by stating the name(s) of the Trustor and the recording information (book and page or instrument number);
• (ii) State that a breach of the obligation for which this Deed of Trust is security has occurred;
• (iii) Set forth the nature of each breach actually known to the Beneficiary at the time;
• (iv) State the Beneficiary's election to sell or cause the Property to be sold to satisfy the obligation.

(c) Within ten (10) business days after recording the Notice of Default, Trustee shall mail copies by registered or certified mail, return receipt requested, to:

• (i) Trustor at Trustor's last known address;
• (ii) All persons who have recorded a Request for Notice under Cal. Civ. Code § 2924b;
• (iii) The successor in interest, if known, to the Trustor;
• (iv) Any person with a recorded junior lien on the Property.

Section 9.2 — Pre-Foreclosure Contact Requirements

If the Property is an owner-occupied residential property with no more than four (4) dwelling units and this Deed of Trust secures a first lien:

(a) The mortgage servicer shall contact the borrower in person or by telephone at least thirty (30) days before recording the Notice of Default to assess the borrower's financial situation and explore options to avoid foreclosure, including loan modification, short sale, or deed in lieu of foreclosure (Cal. Civ. Code § 2923.55);

(b) Within five (5) business days after recording the Notice of Default, the servicer shall send written notice to the borrower regarding the availability of foreclosure prevention alternatives;

(c) The servicer shall designate a single point of contact for the borrower to obtain information about the loan modification process, application requirements, and deadlines (Cal. Civ. Code § 2923.7).

Section 9.3 — Dual Tracking Prohibition

If the borrower submits a complete application for a first-lien loan modification, the mortgage servicer shall not record a Notice of Default, or if a Notice of Default has already been recorded, shall not record a Notice of Sale or conduct a trustee's sale, while the application is pending and until the borrower has been provided with a written determination and, if applicable, has exhausted the right to appeal a denial (Cal. Civ. Code § 2923.6).

Section 9.4 — Right to Reinstate (Cal. Civ. Code § 2924c)

(a) At any time during the period commencing with the recording of the Notice of Default and ending five (5) business days before the date of the trustee's sale, Trustor or any person having a subordinate lien or encumbrance may cure the default and reinstate the loan by paying:

• (i) The entire amount then due under the terms of the Note and this Deed of Trust (other than the principal balance that would not then be due but for the acceleration);
• (ii) All costs and expenses actually incurred in enforcing the obligation and this Deed of Trust, including Trustee's fees and reasonable attorney fees;
• (iii) All advances, if any, made by Beneficiary to protect the security of this Deed of Trust.

(b) Upon cure, the obligation and this Deed of Trust shall be reinstated and shall be and remain in full force and effect as if no acceleration had occurred.

(c) Beneficiary's Statement of Cure Amount. Beneficiary shall, within twenty-one (21) days of a written request, provide Trustor with a statement of the total amount required to cure the default (Cal. Civ. Code § 2943).

Section 9.5 — Notice of Sale (Cal. Civ. Code § 2924f)

If the default is not cured within three (3) months after recording the Notice of Default, Trustee shall give Notice of Trustee's Sale as follows:

(a) Publication. The notice shall be published once a week for three (3) consecutive calendar weeks (with the first publication at least twenty (20) days before the sale) in a newspaper of general circulation in the county where the Property is located;

(b) Posting. The notice shall be posted in a conspicuous place on the Property and in one (1) public place in the city or judicial district where the Property is located, at least twenty (20) days before the sale;

(c) Mailing. The notice shall be mailed by registered or certified mail with postage prepaid at least twenty (20) days before the sale to:

• (i) Trustor at Trustor's last known address;
• (ii) Each person who has recorded a Request for Notice under Cal. Civ. Code § 2924b;
• (iii) The successor in interest to the Trustor;
• (iv) Any person with a recorded lien or interest in the Property.

(d) Content. The Notice of Sale shall include: the time, date, and location of the sale; the street address or other common designation of the Property; the name, address, and telephone number of Trustee; the total amount of the unpaid balance; the estimated amount that will be due at the time of sale; and information regarding the right to reinstate.

Section 9.6 — Trustee's Sale Procedures (Cal. Civ. Code § 2924g)

(a) Time and Place. The sale shall be conducted at public auction between the hours of 9:00 a.m. and 5:00 p.m. on any business day (Monday through Friday) in the county where the Property is located, at the place specified in the Notice of Sale.

(b) Bidding. The Property shall be sold to the highest bidder. All bids shall be in lawful money of the United States. Beneficiary may bid at the sale and may credit bid up to the amount of the Secured Obligations.

(c) Postponement. The sale may be postponed:

• (i) By mutual agreement of Beneficiary and Trustor;
• (ii) By order of any court of competent jurisdiction;
• (iii) By public declaration by Trustee at the time and place of the scheduled sale.

Any postponement shall not exceed a total of 365 days from the original sale date. If postponed for more than 365 days in the aggregate, new Notice of Sale must be given pursuant to Cal. Civ. Code § 2924f.

(d) Trustee's Deed Upon Sale. Upon completion of the sale, Trustee shall execute and deliver to the purchaser a Trustee's Deed Upon Sale, which shall recite compliance with all statutory requirements. The recitals in the Trustee's Deed shall constitute prima facie evidence of compliance.

Section 9.7 — Application of Sale Proceeds

The proceeds of the trustee's sale shall be distributed in the following order of priority:

(a) First: To the costs and expenses of exercising the power of sale, including Trustee's compensation, recording fees, publication costs, and reasonable attorney fees actually incurred;
(b) Second: To payment of the Secured Obligations, including principal, interest, late charges, advances, and all other sums due under the Note and this Deed of Trust;
(c) Third: To satisfaction of all obligations secured by any junior liens or encumbrances, in order of their priority;
(d) Fourth: The surplus, if any, shall be paid to Trustor or to such other persons as may be legally entitled thereto.

ARTICLE X — JUDICIAL FORECLOSURE

Section 10.1 — Right to Judicial Foreclosure

As an alternative to non-judicial foreclosure, Beneficiary may elect to foreclose this Deed of Trust through a judicial action pursuant to California Code of Civil Procedure § 725a et seq.

Section 10.2 — Judicial Foreclosure Procedures

(a) Beneficiary shall file a complaint in the Superior Court of the county where the Property is located;
(b) The court shall determine the amount due and order the Property sold if the debt is not paid within the time specified;
(c) The sale shall be conducted by the county sheriff or a court-appointed commissioner;
(d) The borrower has a statutory right of redemption for a period after judicial foreclosure sale (typically one year if there is a deficiency, or three months if the sale price equals the debt).

Section 10.3 — Consequences of Electing Judicial Foreclosure

(a) Judicial foreclosure permits Beneficiary to seek a deficiency judgment for the difference between the fair market value of the Property and the outstanding debt, subject to the limitations of CCP §§ 580a and 580b;
(b) Trustor shall have a right of redemption as provided by law;
(c) Election of judicial foreclosure does not constitute a waiver of the power of sale contained herein if the judicial action is dismissed without prejudice.

ARTICLE XI — ANTI-DEFICIENCY PROTECTIONS AND ONE-ACTION RULE

Section 11.1 — CCP § 580b — Purchase Money Protection

(a) No deficiency judgment shall lie in any event after a sale of real property for the failure of the purchaser to complete the contract of sale if a deed of trust was given to the vendor to secure payment of the balance of the purchase price.

(b) No deficiency judgment shall lie after a sale under a deed of trust given to a lender to secure repayment of a loan that was in fact used to pay all or part of the purchase price of a dwelling for not more than four families occupied, in whole or in part, by the purchaser.

(c) Refinanced Purchase Money Loans. As amended effective January 1, 2013, CCP § 580b extends anti-deficiency protection to refinanced purchase money loans secured by owner-occupied residential property of one to four units, provided the refinancing was used to pay off the original purchase money loan and the borrower continuously occupied the property as a principal residence.

(d) The protections of CCP § 580b cannot be waived by the borrower at the time the loan is made or at any time thereafter.

Section 11.2 — CCP § 580d — Non-Judicial Foreclosure Protection

(a) No deficiency judgment shall lie in any event after a sale of real property under the power of sale contained in a deed of trust (non-judicial foreclosure).

(b) This prohibition applies regardless of whether the loan is purchase money, regardless of the property type, and regardless of whether the borrower is an individual or entity.

(c) If the beneficiary elects non-judicial foreclosure, the beneficiary waives any right to a deficiency judgment as a matter of law.

(d) Exception — Sold-Out Junior Lienholders. CCP § 580d does not bar a deficiency action by a sold-out junior lienholder whose security has been eliminated by a senior lien foreclosure, unless the junior lien independently qualifies for protection under CCP § 580b.

Section 11.3 — CCP § 580e — Short Sale Protection

No deficiency judgment shall lie for any deficiency remaining after a short sale of residential real property of one to four units approved by the beneficiary in writing, where the trustor is a natural person and the property was the trustor's principal residence at the time of the short sale.

Section 11.4 — CCP § 726 — One-Action Rule

(a) There shall be but one form of action for the recovery of any debt or the enforcement of any right secured by a mortgage or deed of trust upon real property. That action is foreclosure.

(b) Security First Principle. The one-action rule requires the beneficiary to proceed first against the real property security before seeking any personal judgment against the borrower. If the beneficiary attempts to sue on the note or take any other "action" before foreclosure, the borrower may raise the one-action rule as an affirmative defense.

(c) Sanction for Violation. If the beneficiary commences an action on the debt without first exhausting the real property security, the beneficiary may lose its security interest in the property and be treated as an unsecured creditor.

(d) Waiver. The one-action rule is an affirmative defense that may be waived if not timely raised by the borrower.

(e) Multiple Properties. Where a single debt is secured by deeds of trust on multiple properties, the one-action rule requires the beneficiary to foreclose on all properties in a single action or risk losing the security interest in those not included.

Section 11.5 — Interaction of Anti-Deficiency Rules

ARTICLE XII — HOMEOWNER BILL OF RIGHTS PROVISIONS

Section 12.1 — Applicability

The HBOR protections apply when:
(a) This Deed of Trust secures a first lien on the Property;
(b) The Property is a residential real property containing no more than four (4) dwelling units; and
(c) The Property is owner-occupied by the Trustor as a principal residence.

Section 12.2 — Key Borrower Protections

(a) Pre-Foreclosure Contact. The servicer must attempt to contact the borrower at least thirty (30) days before recording a Notice of Default to discuss the borrower's financial situation and available foreclosure prevention options (Cal. Civ. Code § 2923.55);

(b) Single Point of Contact. Upon request for a foreclosure prevention alternative, the servicer must assign a single point of contact who can: (i) communicate the status of any application; (ii) coordinate receipt of required documents; (iii) have access to current information and individuals with authority to stop foreclosure proceedings (Cal. Civ. Code § 2923.7);

(c) Dual Tracking Prohibition. The servicer shall not record a Notice of Default or proceed with a trustee's sale while a complete first-lien loan modification application is pending (Cal. Civ. Code § 2923.6);

(d) Prohibition on Multiple Trustees. Multiple trustees shall not record a Notice of Default or Notice of Sale based on the same or overlapping obligations (Cal. Civ. Code § 2924.17);

(e) Accurate and Complete Documents. Before recording a Notice of Default or Notice of Sale, a mortgage servicer shall ensure that it has reviewed competent and reliable evidence to substantiate the borrower's default and the right to foreclose (Cal. Civ. Code § 2924.17).

Section 12.3 — Borrower's Private Right of Action (Cal. Civ. Code § 2924.12)

(a) Before Sale. If a trustee's deed upon sale has not been recorded, a borrower may bring an action for injunctive relief to enjoin a material violation of HBOR provisions;

(b) After Sale. If a trustee's deed upon sale has been recorded, a borrower may recover actual economic damages resulting from a material violation;

(c) Treble Damages. Where a violation is found to be intentional, reckless, or the result of willful misconduct, the court may award the greater of: (i) treble actual economic damages; or (ii) statutory damages of fifty thousand dollars ($50,000);

(d) Attorney Fees. A prevailing borrower may recover reasonable attorney fees and costs.

Section 12.4 — Zombie Second Mortgage Provisions (Cal. Civ. Code § 2924.13)

When recording a Notice of Default on a junior lien, the servicer or its trustee must also record a certification under penalty of perjury that the servicer (and all prior servicers) did not engage in any unlawful practices as defined in the statute. Failure to comply may invalidate the foreclosure.

ARTICLE XIII — RECONVEYANCE

Section 13.1 — Full Reconveyance Upon Satisfaction (Cal. Civ. Code § 2941)

(a) Upon written request of Beneficiary stating that all sums secured hereby have been paid in full, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention, Trustee shall reconvey, without warranty, the estate held under this Deed of Trust to the person or persons legally entitled thereto.

(b) Beneficiary's Obligation. Within thirty (30) calendar days after the Secured Obligations are fully satisfied, Beneficiary shall execute and deliver to Trustee: (i) the original Note marked "Paid in Full"; (ii) this original Deed of Trust; (iii) a request for full reconveyance; and (iv) any other documents necessary to effect the reconveyance.

(c) Trustee's Obligation. Within twenty-one (21) calendar days after receipt of the documents described in subsection (b), Trustee shall execute and record the full reconveyance in the Official Records of the county where this Deed of Trust is recorded.

Section 13.2 — Penalties for Failure to Reconvey

(a) If the full reconveyance is not recorded within sixty (60) calendar days after satisfaction of the obligation, Beneficiary shall, upon written request by Trustor, execute the reconveyance directly;

(b) If the full reconveyance is not recorded within seventy-five (75) calendar days after satisfaction, a title insurance company may prepare and record a release of the obligation on behalf of Trustor;

(c) Statutory Penalties. A beneficiary who fails to comply with the reconveyance requirements shall forfeit a penalty of five hundred dollars ($500), or ten thousand dollars ($10,000) if the failure is willful (Cal. Civ. Code § 2941(d));

(d) Trustor may also recover actual damages resulting from the failure to reconvey, including damages to credit and costs of correcting the public record.

Section 13.3 — Partial Reconveyance

Beneficiary may, in its sole discretion, direct Trustee to execute and record a partial reconveyance releasing a portion of the Property from the lien of this Deed of Trust, upon such terms and conditions as Beneficiary may require, including partial payment of the Secured Obligations.

ARTICLE XIV — SUBORDINATION PROVISIONS

Section 14.1 — Lien Priority

This Deed of Trust shall have priority over all liens, encumbrances, and interests recorded after the recording of this Deed of Trust, in accordance with California's "first in time, first in right" recording priority rule.

Section 14.2 — Subordination Agreement

(a) This Deed of Trust ☐ is / ☐ is not subordinate to the following existing encumbrance(s):

• Lien Holder: [________________________________]
• Recording Information: [________________________________]
• Original Amount: $[________________________________]

(b) Separate Subordination Agreement Required. Any future subordination of this Deed of Trust shall require a separate, recorded Subordination Agreement specifically describing the senior loan, executed and acknowledged by Beneficiary.

(c) Executory Subordination Requirements. An executory subordination clause (where a senior lender promises to subordinate in the future) must specify: (i) maximum principal amount; (ii) maximum interest rate; (iii) maximum term; (iv) mode of repayment; (v) purpose of the loan; and (vi) allowable fees and charges.

Section 14.3 — Junior Lien Provisions

(a) Trustor shall notify Beneficiary in writing before placing any additional lien or encumbrance on the Property;
(b) The creation of a junior lien without Beneficiary's consent may constitute an Event of Default under Section 8.1(b);
(c) In the event of foreclosure of a senior lien, any junior lienholder's interest shall be extinguished by the foreclosure sale, subject to the junior lienholder's right to bid at the sale and right to reinstate (Cal. Civ. Code § 2924c).

ARTICLE XV — ENVIRONMENTAL COMPLIANCE

Section 15.1 — Representations and Warranties

Trustor represents and warrants that:

(a) To the best of Trustor's knowledge, no Hazardous Materials (as defined below) have been generated, stored, treated, released, or disposed of on, under, or about the Property in violation of any Environmental Law;
(b) The Property is in compliance with all applicable Environmental Laws;
(c) There are no pending or threatened environmental claims, investigations, or proceedings affecting the Property;
(d) Trustor has not received any notice from any governmental authority regarding violations of Environmental Laws.

Section 15.2 — Covenants

Trustor covenants and agrees:

(a) To comply with all applicable Environmental Laws and not to cause or permit the presence, use, disposal, storage, or release of any Hazardous Materials on or about the Property, except for small quantities of household chemicals used in ordinary residential maintenance;
(b) To promptly notify Beneficiary of any release or threatened release of Hazardous Materials and any environmental claim, investigation, or proceeding;
(c) To remediate any contamination at Trustor's sole expense and in compliance with applicable law;
(d) To permit Beneficiary to conduct environmental assessments of the Property at Trustor's expense if Beneficiary has a reasonable belief that Hazardous Materials may be present.

Section 15.3 — Environmental Indemnification

Trustor shall indemnify, defend, and hold Beneficiary and Trustee harmless from and against all losses, liabilities, claims, damages, penalties, costs, and expenses (including reasonable attorney fees) arising from: (a) any breach of the environmental representations, warranties, or covenants herein; (b) the presence of Hazardous Materials on the Property; or (c) any environmental cleanup costs or remediation obligations. This indemnification shall survive foreclosure, trustee's sale, deed in lieu of foreclosure, or reconveyance.

Section 15.4 — Definitions

"Environmental Laws" means all federal, state, and local laws, ordinances, regulations, and orders relating to the protection of the environment, including but not limited to: the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, 42 U.S.C. § 9601 et seq.); the Resource Conservation and Recovery Act (RCRA); the California Hazardous Waste Control Law (Cal. Health & Safety Code § 25100 et seq.); and the California Safe Drinking Water and Toxic Enforcement Act (Proposition 65).

"Hazardous Materials" means any substance, material, or waste that is classified as hazardous, toxic, or dangerous under any Environmental Law, including petroleum and petroleum byproducts, asbestos-containing materials, lead-based paint, mold, radon, polychlorinated biphenyls (PCBs), and radioactive materials.

ARTICLE XVI — MISCELLANEOUS PROVISIONS

Section 16.1 — Governing Law

This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California, without regard to conflict of law principles.

Section 16.2 — Successors and Assigns

This Deed of Trust shall bind and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and assigns. Beneficiary may assign its rights under this Deed of Trust without notice to or consent of Trustor.

Section 16.3 — Severability

If any provision of this Deed of Trust is held invalid, illegal, or unenforceable by a court of competent jurisdiction, such holding shall not affect the validity or enforceability of the remaining provisions, which shall continue in full force and effect.

Section 16.4 — Notices

All notices, requests, demands, and other communications required or permitted under this Deed of Trust shall be in writing and shall be deemed given when:
(a) Personally delivered;
(b) Sent by overnight courier (deemed received the next business day);
(c) Mailed by certified or registered mail, return receipt requested, postage prepaid (deemed received three (3) business days after mailing); or
(d) Sent by electronic mail with confirmation of receipt, if expressly authorized by both parties.

Notices shall be addressed to the parties at the addresses set forth above, or to such other address as a party may designate by written notice.

Section 16.5 — Captions and Headings

Captions, headings, and article titles are for convenience of reference only and shall not affect the interpretation or construction of this Deed of Trust.

Section 16.6 — Entire Agreement

This Deed of Trust, the Note, and all related loan documents constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior negotiations, representations, warranties, and understandings.

Section 16.7 — Amendments

This Deed of Trust may not be modified, amended, or supplemented except by a written instrument executed and acknowledged by all parties and recorded in the Official Records.

Section 16.8 — Waiver

No waiver of any provision of this Deed of Trust shall be effective unless in writing and signed by the waiving party. No waiver shall constitute a continuing waiver or a waiver of any other provision.

Section 16.9 — Joint and Several Liability

If Trustor consists of more than one person or entity, the obligations of each Trustor hereunder shall be joint and several.

Section 16.10 — Attorney Fees

In any action or proceeding to enforce or interpret this Deed of Trust, the prevailing party shall be entitled to recover reasonable attorney fees and costs, as determined by the court, in addition to any other relief awarded.

Section 16.11 — Request for Notice of Default (Cal. Civ. Code § 2924b)

Trustor and any interested party may record a Request for Notice of Default and Sale in the Official Records of the county where the Property is located. The Request shall:
(a) Be signed and acknowledged by the person requesting notice;
(b) Specify the name and address of the person to whom notice is to be mailed;
(c) Identify this Deed of Trust by stating the names of the parties, the date of recordation, and the recording information (book and page or instrument number);
(d) Not affect title to the Property or constitute notice that the requesting party has any interest in the Property.

Trustor hereby requests that a copy of any Notice of Default and a copy of any Notice of Sale hereunder be mailed to Trustor at the address set forth above.

Section 16.12 — Time of the Essence

Time is of the essence with respect to every provision of this Deed of Trust.

Section 16.13 — Construction

This Deed of Trust shall not be construed more strictly against one party than another merely by virtue of the fact that it may have been drafted by counsel for one of the parties.

ARTICLE XVII — RIDERS AND ADDENDA

The following riders and addenda are attached hereto and incorporated herein by reference (check all that apply):

☐ Adjustable Rate Mortgage (ARM) Rider
☐ Condominium Rider
☐ Planned Unit Development (PUD) Rider
☐ Second Home Rider
☐ 1-4 Family Rider
☐ Biweekly Payment Rider
☐ Construction Loan Rider
☐ Balloon Payment Rider
☐ Graduated Payment Rider
☐ Interest-Only Rider
☐ Home Equity Line of Credit (HELOC) Rider
☐ Environmental Indemnity Agreement
☐ Subordination Agreement
☐ Other: [________________________________]

SIGNATURE PAGE

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.

TRUSTOR(S):

___________________________________________
Name: [________________________________]
Date: [__/__/____]

___________________________________________
Name: [________________________________]
Date: [__/__/____]

NOTARY ACKNOWLEDGMENT

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of [________________________________]

On [__/__/____], before me, [________________________________], a Notary Public, personally appeared [________________________________], who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

___________________________________________
Signature of Notary Public

Name (Printed): [________________________________]
My Commission Expires: [__/__/____]
Commission Number: [________________________________]

[NOTARY SEAL]

(If additional Trustors, attach additional acknowledgment pages as needed.)

REQUEST FOR NOTICE OF DEFAULT AND SALE

(Cal. Civ. Code § 2924b)

In accordance with California Civil Code § 2924b, the undersigned requests that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust described below be mailed to:

Name: [________________________________]
Address: [________________________________]
City/State/Zip: [________________________________]

Deed of Trust Information:

• Trustor(s): [________________________________]
• Beneficiary: [________________________________]
• Trustee: [________________________________]
• Date of Recording: [__/__/____]
• Recording No./Instrument No.: [________________________________]
• Book: [____] Page: [____]
• County of Recording: [________________________________]

This request shall not affect title to the real property described in the Deed of Trust.

___________________________________________
Signature of Requesting Party
Date: [__/__/____]

ACKNOWLEDGMENT
(Same form as above, per Cal. Civ. Code § 1189)

EXHIBIT A — LEGAL DESCRIPTION

The land referred to herein is situated in the County of [________________________________], State of California, and is described as follows:

[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]

Assessor's Parcel Number (APN): [________________________________]

EXHIBIT B — DOCUMENT PREPARATION STATEMENT

This document was prepared by:

Name: [________________________________]
Firm: [________________________________]
Address: [________________________________]
City/State/Zip: [________________________________]
Telephone: [________________________________]
Email: [________________________________]
State Bar No.: [________________________________]

Sources and References

• Cal. Civ. Code §§ 2920-2944.7 — Mortgages in General
• Cal. Civ. Code § 2924 — Non-Judicial Foreclosure
• Cal. Civ. Code § 2924b — Request for Notice of Default
• Cal. Civ. Code § 2924c — Right to Reinstate
• Cal. Civ. Code § 2924f — Notice of Sale
• Cal. Civ. Code § 2924g — Trustee's Sale Procedures
• Cal. Civ. Code § 2924.12 — HBOR Private Right of Action
• Cal. Civ. Code § 2924.13 — Zombie Second Mortgage Provisions
• Cal. Civ. Code § 2934a — Substitution of Trustee
• Cal. Civ. Code § 2941 — Reconveyance
• Cal. Civ. Code § 1189 — Notary Acknowledgment Form
• Cal. Code Civ. Proc. § 580b — Anti-Deficiency (Purchase Money)
• Cal. Code Civ. Proc. § 580d — Anti-Deficiency (Non-Judicial Foreclosure)
• Cal. Code Civ. Proc. § 726 — One-Action Rule
• California Homeowner Bill of Rights — Attorney General
• California Homeowner Bill of Rights — Nolo
• 12 U.S.C. § 1701j-3 — Garn-St. Germain (Due-on-Sale)
• California Anti-Deficiency Laws Overview
• One-Action Rule and Anti-Deficiency Protections
• California Lien Priority Rules

Prepared for attorney review. This template is provided for informational purposes only and does not constitute legal advice.