MORTGAGE AGREEMENT
(State of Oregon – Judicial Foreclosure Form)
[// GUIDANCE: This template is designed for use in Oregon where the security instrument is a mortgage (judicial foreclosure), not a deed of trust (non-judicial foreclosure). Oregon counsel should review and tailor all bracketed items before use.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Grant of Mortgage & Secured Obligations
- Performance, Payment & Taxes
- Representations & Warranties
- Covenants & Restrictions
- Insurance & Casualty Proceeds
- Environmental Matters
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
- Exhibit A – Legal Description
- Exhibit B – Schedule of Exceptions (if any)
1. DOCUMENT HEADER
MORTGAGE AGREEMENT (the “Mortgage”) made as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [BORROWER LEGAL NAME], a [STATE & TYPE OF ENTITY/INDIVIDUAL] (“Borrower” or “Mortgagor”), whose address is [BORROWER ADDRESS]; and
• [LENDER LEGAL NAME], a [STATE & TYPE OF ENTITY] (“Lender” or “Mortgagee”), whose address is [LENDER ADDRESS].
Recitals
A. Borrower is the fee simple owner of the real property more particularly described in Exhibit A (the “Property”).
B. Borrower has executed that certain Promissory Note dated as of the Effective Date in the original principal amount of $[PRINCIPAL AMOUNT] (together with all renewals, modifications and extensions, the “Note”).
C. As a condition precedent to making the loan evidenced by the Note (the “Loan”), Lender requires that Borrower grant this Mortgage to secure the Secured Obligations (defined below).
D. Borrower and Lender desire to set forth their agreement in this Mortgage.
NOW, THEREFORE, in consideration of the Loan and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:
2. DEFINITIONS
The following terms shall have the meanings set forth below. Capitalized terms not defined herein have the meanings given in the Note.
“Code” means the Internal Revenue Code of 1986, as amended.
“Event of Default” has the meaning set forth in Section 9.1.
“Impositions” means all taxes, assessments, water and sewer charges, and other governmental or municipal charges.
“Indemnified Parties” means Lender and its successors, assigns, officers, directors, employees and agents.
“Loan Documents” means collectively this Mortgage, the Note, and all other documents now or hereafter evidencing, securing or guaranteeing the Loan.
“Obligations” or “Secured Obligations” means (i) payment and performance of the Note, (ii) all covenants and agreements of Borrower under this Mortgage and the other Loan Documents, and (iii) all renewals, extensions, amendments, and substitutions thereof.
“Permitted Encumbrances” means only those liens, easements or restrictions expressly listed on Exhibit B.
“Property” has the meaning set forth in the recitals and includes all Improvements, fixtures and Personal Property (each as defined below).
[// GUIDANCE: Add any additional defined terms specific to the transaction (e.g., “Construction Improvements”, “Ground Lease”).]
3. GRANT OF MORTGAGE & SECURED OBLIGATIONS
3.1 Grant. Borrower hereby irrevocably grants, bargains, sells, conveys, mortgages and warrants to Lender, with power of sale only as may be authorized by law upon foreclosure judgment, the Property, TO HAVE AND TO HOLD the same unto Lender and its successors and assigns forever, in trust, however, TO SECURE the full and punctual payment and performance of the Secured Obligations.
3.2 Fixture Filing. This Mortgage shall be deemed a fixture filing with respect to all fixtures located on or to be affixed to the Property. The mailing address of Borrower (debtor) and Lender (secured party) are as set forth in the header above.
3.3 After-Acquired Property. All right, title and interest of Borrower in and to later-acquired estates, buildings, fixtures, easements, appurtenances, rents, profits and proceeds are hereby included in the lien of this Mortgage.
3.4 Further Assurances. Borrower shall execute, acknowledge and deliver such further instruments as Lender may reasonably request to perfect and continue the lien granted herein.
4. PERFORMANCE, PAYMENT & TAXES
4.1 Payment of Secured Obligations. Borrower shall pay the Secured Obligations when due in lawful money of the United States, without setoff, counterclaim or deduction.
4.2 Escrow for Taxes and Insurance. Upon written demand by Lender, Borrower shall deposit monthly into an escrow account amounts sufficient to pay Impositions and insurance premiums before delinquency.
4.3 Taxes and Other Charges.
(a) Borrower shall pay all Impositions prior to delinquency.
(b) Borrower may contest Impositions in good faith, provided (i) Borrower first deposits with Lender security satisfactory to Lender, and (ii) such contest does not result in a lien senior to or on parity with this Mortgage.
4.4 Late Charges & Default Interest. If any payment is not received within [GRACE PERIOD, e.g., 10] days after its due date, Borrower shall pay a late charge of [__]% of the overdue amount. During an Event of Default, the Secured Obligations shall bear interest at the Default Rate specified in the Note.
5. REPRESENTATIONS & WARRANTIES
Borrower represents and warrants to Lender that, as of the Effective Date and continuing thereafter:
(a) Organization & Authority. Borrower is duly organized, validly existing and in good standing under the laws of its state of formation, and has full right, power and authority to execute and deliver the Loan Documents.
(b) Title. Borrower owns good and marketable fee simple title to the Property, free of any liens other than Permitted Encumbrances.
(c) Compliance with Laws. The Property and its current use comply in all material respects with applicable building, zoning, environmental and other laws.
(d) Pending Litigation. There is no pending or, to Borrower’s knowledge, threatened litigation or proceeding affecting Borrower or the Property that would materially impair Borrower’s ability to perform its Obligations.
(e) Hazardous Materials. To Borrower’s knowledge, no Hazardous Materials (as defined in Section 8.1) have been released on the Property in violation of Environmental Laws.
(f) Financial Information. All financial statements delivered to Lender are true, complete and fairly present Borrower’s financial condition.
The representations and warranties shall survive closing and shall be deemed continuing until the Secured Obligations are paid in full.
6. COVENANTS & RESTRICTIONS
6.1 Affirmative Covenants. Borrower shall:
(a) Maintain the Property in good condition, repair and working order;
(b) Keep the Property free of all liens except Permitted Encumbrances;
(c) Maintain its existence and good standing;
(d) Provide to Lender annual financial statements within [90] days after fiscal year end and such other information as Lender reasonably requests;
(e) Permit Lender and its agents reasonable access to inspect the Property upon [24]-hour prior notice (except in emergency).
6.2 Negative Covenants. Borrower shall not, without Lender’s prior written consent:
(a) Transfer, convey, sell, assign or encumber any interest in the Property, other than Permitted Encumbrances;
(b) Permit any change in the intended use of the Property that would materially increase risk or violate zoning laws;
(c) Permit waste;
(d) Alter, demolish or remove material Improvements except as necessary for maintenance or permitted restoration.
6.3 Notice & Cure. Borrower shall give Lender prompt written notice of (i) any Event of Default, (ii) any casualty or condemnation affecting the Property, or (iii) any material violation of law. Unless another period is specifically provided, Borrower shall have thirty (30) days after notice to cure any covenant breach; provided, if such breach is not reasonably capable of cure within 30 days, Borrower shall have such additional time (not to exceed 90 days) as long as Borrower diligently pursues cure and no material adverse effect results.
7. INSURANCE & CASUALTY PROCEEDS
7.1 Required Insurance. Borrower shall maintain at its expense:
(a) Property insurance (Special Form/Cause of Loss) in an amount not less than 100% of full replacement cost;
(b) Commercial General Liability insurance with minimum limits of $[] per occurrence/$[] aggregate;
(c) Flood insurance if the Property is in a Special Flood Hazard Area;
(d) Such additional coverages as Lender reasonably requires.
7.2 Endorsements; Mortgagee Clause. All policies shall name Lender as mortgagee and loss payee pursuant to a standard mortgagee clause, provide for at least 30 days’ prior written notice of cancellation or material change, and waive subrogation against Lender.
7.3 Casualty or Condemnation. Borrower shall promptly notify Lender of any casualty loss or taking. Lender may (i) apply proceeds to restoration of the Property, or (ii) apply proceeds to the Secured Obligations, in accordance with reasonable standards then applied by institutional lenders in Oregon.
8. ENVIRONMENTAL MATTERS
8.1 Definition. “Hazardous Materials” means asbestos, petroleum, polychlorinated biphenyls, and substances defined as “hazardous” or “toxic” under any federal, state or local Environmental Laws.
8.2 Covenants. Borrower shall:
(a) Comply with all Environmental Laws;
(b) Not cause or permit Hazardous Materials to be generated, used, stored or disposed of on the Property, except in compliance with Environmental Laws;
(c) Promptly remediate any Hazardous Materials release in accordance with Environmental Laws and sound engineering practice.
8.3 Indemnity. Borrower shall defend, indemnify and hold the Indemnified Parties harmless from all claims, liabilities and losses (including reasonable attorneys’ fees) arising from any breach of this Section 8 or the presence or release of Hazardous Materials at, from or onto the Property, whether pre-existing or future, except to the extent caused by the gross negligence or willful misconduct of an Indemnified Party. This indemnity shall survive satisfaction of the Secured Obligations and foreclosure of this Mortgage.
9. DEFAULT & REMEDIES
9.1 Events of Default
Each of the following constitutes an “Event of Default”:
(a) Non-payment of any amount due under the Note or this Mortgage within [10] days after the same is due;
(b) Breach of any covenant or agreement in any Loan Document, not cured within any applicable cure period;
(c) Any representation or warranty proves materially false when made;
(d) Borrower becomes insolvent, makes an assignment for the benefit of creditors, or becomes subject to any bankruptcy or receivership proceeding;
(e) Material casualty or condemnation not covered by insurance and not otherwise cured to Lender’s satisfaction;
(f) Any lien or encumbrance (other than a Permitted Encumbrance) attaining priority over this Mortgage and not released within 30 days.
9.2 Notice & Cure
Except for payment defaults (which require no notice) and except where a shorter period is specified by applicable law, Lender shall give Borrower written notice of default and a 30-day opportunity to cure before exercising remedies.
9.3 Remedies
Upon an Event of Default and expiration of any required cure period, Lender may, in addition to any rights available under the Loan Documents or applicable law:
(a) Accelerate the Secured Obligations and declare the entire unpaid balance immediately due and payable;
(b) Commence a judicial foreclosure proceeding under Oregon law (Or. Rev. Stat. ch. 88) in the Circuit Court of the county where the Property is located, obtain a foreclosure judgment and decree of sale, and cause the Property to be sold by the sheriff;
(c) Seek appointment of a receiver to take possession, collect rents and protect the Property pending foreclosure;
(d) Enter and protect the Property, perform Borrower’s obligations (with all reasonable costs added to the Secured Obligations), or otherwise protect Lender’s security;
(e) Exercise all rights with respect to Personal Property and fixtures as a secured party under the Uniform Commercial Code;
(f) Pursue any other remedy available at law or in equity, including a deficiency judgment to the extent not prohibited by applicable Oregon law.
9.4 Foreclosure Procedures & Statutory Rights
Borrower acknowledges:
(i) Foreclosure of this Mortgage shall be judicial.
(ii) Following sheriff’s sale, Borrower (and certain lienholders) may redeem the Property within the statutory redemption period, currently six (6) months for most residential property.
(iii) Oregon law restricts or bars deficiency judgments following foreclosure of certain purchase-money residential mortgages; Lender’s right to a deficiency judgment hereunder shall be limited accordingly.
[// GUIDANCE: Counsel should confirm current statutes governing redemption periods and purchase-money deficiency prohibitions before closing.]
10. RISK ALLOCATION
10.1 Indemnification by Borrower. Borrower shall indemnify and hold the Indemnified Parties harmless from and against all claims, losses and expenses arising out of (i) the Loan or the Property, (ii) breach of any representation, warranty or covenant of Borrower, or (iii) enforcement of the Loan Documents, except to the extent caused by the gross negligence or willful misconduct of an Indemnified Party.
10.2 Limitation of Liability. Notwithstanding anything to the contrary, the personal liability of Borrower shall in all events be limited to the Secured Obligations and to the extent of Borrower’s interest in the Property and any collateral given to secure the Loan; provided, however, Borrower shall be personally liable (and liability shall not be limited to the collateral) for:
(a) fraud or intentional misrepresentation;
(b) misapplication of insurance or condemnation proceeds;
(c) voluntary waste;
(d) Environmental indemnities under Section 8;
(e) any breach of the indemnities in this Section 10.
10.3 Force Majeure. Deadlines for Borrower’s performance (other than payment obligations) shall be extended to the extent delayed by acts of God, civil unrest, labor disputes, pandemics or other events beyond Borrower’s reasonable control; provided, Borrower gives Lender prompt notice and diligent efforts to mitigate delay.
11. DISPUTE RESOLUTION
11.1 Governing Law. This Mortgage and the other Loan Documents shall be governed by, and construed in accordance with, the laws of the State of Oregon, without regard to conflicts of law principles.
11.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in the county where the Property is situated (and, if federal jurisdiction exists, the U.S. District Court for the District of Oregon) for any action arising out of the Loan Documents, and waives any objection based on forum non conveniens.
11.3 Arbitration. The parties expressly agree that arbitration is excluded; disputes shall be resolved solely in the courts identified above.
11.4 Jury Trial Waiver. To the fullest extent permitted by law, the parties waive trial by jury in any action or proceeding arising out of the Loan Documents.
11.5 Injunctive Relief. Nothing herein shall limit Lender’s right to seek provisional remedies, specific performance or injunctive relief, including the equitable remedy of foreclosure.
12. GENERAL PROVISIONS
12.1 Amendments; Waivers. No amendment or waiver shall be effective unless in writing and signed by the party to be charged. Any waiver shall be limited to its express terms and shall not be construed as a waiver of subsequent breaches.
12.2 Assignment. Lender may assign or participate its interest in the Loan Documents without consent of Borrower. Borrower may not assign its rights or delegate its obligations without Lender’s prior written consent.
12.3 Successors & Assigns. All covenants herein shall bind and benefit the parties and their respective successors and assigns, subject to the restrictions on assignment above.
12.4 Severability. If any provision is held unenforceable, the remainder shall remain in full force, and the unenforceable provision shall be reformed to the minimum extent necessary to achieve its intended purpose.
12.5 Integration. The Loan Documents constitute the entire agreement of the parties with respect to the Loan and supersede all prior or contemporaneous understandings.
12.6 Counterparts; Electronic Signatures. This Mortgage may be executed in counterparts, each of which is deemed an original, and all of which constitute one instrument. Electronic signatures and signature pages exchanged by PDF or other electronic means shall be deemed originals.
12.7 Notices. All notices shall be in writing and delivered by (i) hand, (ii) nationally-recognized overnight courier, or (iii) certified U.S. Mail, return receipt requested, to the addresses stated in the header (or such other address as a party designates in writing). Notice is deemed given upon receipt or refusal.
12.8 Recording. Borrower authorizes Lender to record this Mortgage and any related instruments in the real property records of the county where the Property is located and to file UCC fixture filings.
13. EXECUTION BLOCK
IN WITNESS WHEREOF, the parties have executed this Mortgage as of the Effective Date.
Borrower (Mortgagor):
[NAME & TITLE]
[Entity Name]
Lender (Mortgagee):
[NAME & TITLE]
[Entity Name]
ACKNOWLEDGMENT – BORROWER
State of ___ )
County of _______ ) ss.
On this _ day of __, 20__, before me, the undersigned Notary Public, personally appeared _____, [personally known to me / proved to me on the basis of satisfactory evidence] to be the individual(s) whose name(s) is/are subscribed to the within instrument and acknowledged 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 individual(s), or the entity upon behalf of which the individual(s) acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public for the State of _
My Commission Expires: _______
[// GUIDANCE: Add separate acknowledgment for Lender if required by recorder’s office.]
14. EXHIBIT A – LEGAL DESCRIPTION
[INSERT FULL METES AND BOUNDS OR LOT/BLOCK LEGAL DESCRIPTION]
15. EXHIBIT B – SCHEDULE OF EXCEPTIONS
(List of Permitted Encumbrances, e.g., easements, covenants, taxes not yet due)
[// GUIDANCE: Oregon recording requirements typically mandate a cover sheet, a return address on the first page, and a font size of at least 10-point. Confirm county-specific formatting rules (margins, document title, tax statement).]
[// GUIDANCE: Review Or. Rev. Stat. §§ 86 & 88 for current foreclosure, redemption and deficiency statutes. Consider substitution of trustee and assignment of rents provisions if a deed of trust is later used.]