MORTGAGE AGREEMENT
(Pennsylvania – Judicial Foreclosure State)
[// GUIDANCE: This is a lien‐theory “mortgage” (not a deed of trust). It is drafted for residential or commercial fee-simple real property located in Pennsylvania. Replace all bracketed placeholders before use and conform exhibits (e.g., legal description, promissory note). Double-check county-level recording requirements (margins, font size, cover sheet, etc.).]
TABLE OF CONTENTS
- Document Header
- Definitions
- Grant of Mortgage & Secured Obligations
- Representations and Warranties
- Covenants
- Events of Default
- Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution and Acknowledgment
1. DOCUMENT HEADER
1.1 Parties
This Mortgage Agreement (this “Mortgage”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
(a) [LENDER NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [LENDER ADDRESS] (“Lender”); and
(b) [BORROWER NAME], a [STATE] [ENTITY TYPE/NATURAL PERSON] residing/located at [BORROWER ADDRESS] (“Borrower”).
1.2 Recitals
A. Borrower is indebted to Lender under that certain Promissory Note dated [NOTE DATE] in the original principal amount of $[LOAN_AMOUNT] (the “Note”).
B. Borrower is the fee simple owner of the real property described in Exhibit A (the “Property”).
C. As security for the Note and the other Secured Obligations (defined below), Borrower agrees to grant this Mortgage in favor of Lender.
1.3 Consideration
For valuable consideration, the receipt and adequacy of which are acknowledged, the parties agree as follows.
1.4 Governing Law and Jurisdiction
This Mortgage shall be governed by and construed in accordance with the real estate laws of the Commonwealth of Pennsylvania, without regard to its conflict-of-laws rules.
2. DEFINITIONS
For ease of reference, the following capitalized terms have the meanings set forth below. Any term used but not defined herein shall have the meaning ascribed in the Note or applicable law.
“Affiliate” – Any entity controlling, controlled by, or under common control with a party.
“Business Day” – Any day other than Saturday, Sunday, or a Pennsylvania state or federal holiday.
“Code” – The Internal Revenue Code of 1986, as amended.
“County” – The County of [COUNTY], Commonwealth of Pennsylvania.
“Default Rate” – The rate specified in Section 6.3.
“Environmental Law” – Any applicable federal, state, or local statute, regulation, ordinance, or common-law principle relating to pollution, protection of human health, or the environment.
“Event of Default” – Any event described in Section 6.1.
“Foreclosure Proceeding” – A judicial foreclosure action filed in the Court of Common Pleas of the County.
“Indemnified Parties” – Defined in Section 8.1.
“Permitted Liens” – Liens approved in writing by Lender.
“Person” – Any individual, corporation, partnership, limited liability company, trust, or other legal entity.
“Secured Obligations” – (i) All indebtedness evidenced by the Note; (ii) interest, late charges, and Default Rate interest thereon; (iii) all advances, protective disbursements, costs, and expenses described herein; and (iv) all other obligations of Borrower to Lender arising under any Loan Documents.
“State” – The Commonwealth of Pennsylvania.
3. GRANT OF MORTGAGE & SECURED OBLIGATIONS
3.1 Grant. Borrower hereby irrevocably mortgages, grants, and conveys to Lender, with Mortgage Covenants, and with power of sale to the extent permitted by law, the Property together with:
(a) all improvements, fixtures, and appurtenances now or hereafter erected on the Property;
(b) all easements, rights-of-way, and hereditaments;
(c) all leases, rents, issues, and profits (subject to Section 5.4); and
(d) all proceeds of the foregoing (collectively, the “Mortgaged Premises”).
3.2 Nature of Lien. This instrument creates a first-priority, continuing lien securing the Secured Obligations.
3.3 Future Advances. The lien of this Mortgage shall also secure future advances under the Note or otherwise, not to exceed the maximum principal amount of $[SECURED_DEBT_AMOUNT] outstanding at any one time.
3.4 Recording. Borrower shall cause this Mortgage, and any modification, to be duly recorded in the office of the Recorder of Deeds of the County.
[// GUIDANCE: Pennsylvania is a “judicial foreclosure” state; power-of-sale language is not self-executing but signals borrower agreement to entry of in personam judgments if permitted.]
4. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender, on the Effective Date and continuing until satisfaction of the Secured Obligations:
4.1 Title. Borrower holds fee simple title to the Property free of Liens other than Permitted Liens.
4.2 Authority. Borrower has full power and right to execute and deliver this Mortgage and to perform its obligations hereunder.
4.3 Enforceability. This Mortgage constitutes a legal, valid, and binding obligation of Borrower, enforceable against Borrower in accordance with its terms.
4.4 Compliance. The Property and its present use comply with all applicable zoning, building, environmental, and other laws.
4.5 No Litigation. No pending or threatened litigation or condemnation affects the Property.
4.6 Survival. All representations and warranties survive the recordation of this Mortgage and any foreclosure sale.
5. COVENANTS
Borrower covenants and agrees that until the Secured Obligations are paid in full:
5.1 Payment. Borrower shall pay, when due, principal, interest, and all other sums owing under the Note and Loan Documents.
5.2 Taxes and Assessments. Borrower shall pay before delinquency all real estate taxes and assessments on the Property.
5.3 Insurance. Borrower shall maintain insurance [TYPE AND LIMITS] naming Lender as mortgagee and loss payee under standard mortgagee clauses.
5.4 Assignment of Rents. Borrower hereby absolutely and presently assigns to Lender all current and future leases and rents of the Property; provided, Lender grants Borrower a revocable license to collect same until an Event of Default occurs.
5.5 Maintenance. Borrower shall keep the Property in good repair and not commit waste.
5.6 Further Assurances. Borrower shall execute and deliver such further instruments as Lender reasonably requests to perfect or continue the lien hereof.
5.7 Transfer Restrictions. Except with Lender’s prior written consent, Borrower shall not sell, convey, or encumber the Property, other than Permitted Liens.
5.8 Notice of Certain Events. Borrower shall promptly notify Lender of: (a) any Event of Default; (b) material casualty; (c) condemnation; or (d) material violation of law.
6. EVENTS OF DEFAULT
6.1 Enumerated Events. Each of the following constitutes an “Event of Default”:
(a) Payment Default – Failure to pay any amount under the Note within [10] days after due.
(b) Covenant Default – Failure to perform any covenant or obligation under this Mortgage or the Note within [30] days after written notice.
(c) Insolvency – Borrower’s insolvency, bankruptcy filing, or assignment for the benefit of creditors.
(d) Misrepresentation – Any material misrepresentation in connection with the Loan Documents.
6.2 Cure Periods. Where a cure period is specified, Borrower shall diligently pursue cure. No cure period applies to payment defaults beyond any applicable grace period under the Note.
6.3 Default Interest. Upon an Event of Default, all Secured Obligations shall bear interest at the lesser of (i) [DEFAULT RATE]% per annum above the rate stated in the Note, or (ii) the maximum rate permitted by law.
7. REMEDIES
7.1 Acceleration. Upon an Event of Default, Lender may declare all Secured Obligations immediately due and payable.
7.2 Foreclosure. Lender may commence a Foreclosure Proceeding in the Court of Common Pleas of the County. Borrower waives any requirement of bond by Lender to the fullest extent permitted by law.
7.3 Receiver. Lender shall be entitled, upon filing of the foreclosure complaint, to appointment of a receiver for the Property without notice or hearing.
7.4 Right of Redemption. Borrower’s equitable right of redemption shall exist only until the Property is sold at sheriff’s sale and deed delivered; Borrower acknowledges that Pennsylvania law affords no statutory right of redemption following such sale.
7.5 Deficiency Judgment. Subject to 42 Pa. Cons. Stat. § 8103, Lender may seek a deficiency judgment for any balance remaining after application of sale proceeds. Borrower agrees that the fair market value of the Property shall be determined in the manner prescribed by such statute.
7.6 Additional Remedies. Lender may exercise any other right or remedy available at law or in equity, including specific performance, injunctive relief, or setoff. No single remedy is exclusive.
7.7 Waiver of Appraisement and Stay. To the fullest extent permitted by law, Borrower waives all appraisement, valuation, stay, extension, and moratorium laws.
7.8 Application of Proceeds. Sale proceeds shall be applied in the following order: (i) costs of sale; (ii) expenses, advances, and protective disbursements; (iii) outstanding interest (including Default Rate interest); (iv) principal; (v) all other Secured Obligations; and (vi) any surplus to Borrower or as otherwise required by law.
8. RISK ALLOCATION
8.1 Indemnification. Borrower shall indemnify, defend, and hold harmless Lender, its successors and assigns, and their respective officers, directors, employees, and agents (collectively, the “Indemnified Parties”) from and against any and all claims, losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(a) ownership, operation, or condition of the Property;
(b) violation of any Environmental Law;
(c) any inaccuracy under the Loan Documents; or
(d) the foreclosure or defense of this Mortgage.
8.2 Limitation of Lender Liability. Lender’s total liability under the Loan Documents shall not exceed the aggregate amount actually paid to Lender by Borrower under the Secured Obligations (the “Liability Cap”).
8.3 Force Majeure. Neither party shall be liable for failure to perform non-monetary obligations due to acts of God, war, terrorism, civil unrest, or other events beyond its reasonable control, provided performance resumes promptly once the force majeure event ceases.
9. DISPUTE RESOLUTION
9.1 Governing Law. The laws of the Commonwealth of Pennsylvania govern all matters arising out of or relating to this Mortgage.
9.2 Forum Selection. Any action arising from or relating to this Mortgage shall be filed exclusively in the Court of Common Pleas for the County, and the parties submit to the personal jurisdiction of such court.
9.3 Arbitration Excluded. The parties expressly disclaim any agreement to arbitrate disputes.
9.4 Jury Trial Waiver. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION RELATING TO THE LOAN DOCUMENTS. [// GUIDANCE: Delete if client determines waiver unenforceable or undesirable.]
9.5 Equitable Relief. Nothing herein limits Lender’s right to seek or obtain injunctive or equitable relief, including foreclosure, appointment of a receiver, or specific performance.
10. GENERAL PROVISIONS
10.1 Amendments and Waivers. No amendment or waiver of any provision shall be effective unless in writing and signed by the party against whom enforcement is sought.
10.2 Assignment. Lender may assign this Mortgage and the Secured Obligations without Borrower consent. Borrower may not assign any rights without Lender’s prior written consent.
10.3 Successors and Assigns. This Mortgage binds and benefits the parties and their respective successors and permitted assigns.
10.4 Severability. If any provision is invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to effectuate the parties’ intent.
10.5 Merger. This Mortgage, together with the Note and other Loan Documents, constitutes the entire agreement of the parties with respect to the subject matter and supersedes all prior agreements.
10.6 Counterparts; Electronic Signatures. This Mortgage may be executed in counterparts, each of which is an original and all of which constitute one instrument. Signatures delivered electronically or by facsimile are binding to the same extent as originals.
10.7 Notices. All notices shall be in writing and delivered (i) by certified mail, return receipt requested, (ii) by nationally recognized overnight courier, or (iii) by personal delivery, to the addresses set forth in Section 1.1. Notice is effective upon receipt or refusal.
10.8 Attorneys’ Fees. Borrower shall pay all reasonable attorneys’ fees and costs incurred by Lender to enforce or protect its rights under the Loan Documents, whether or not litigation is commenced.
10.9 Headings. Headings are for convenience only and do not affect interpretation.
11. EXECUTION AND ACKNOWLEDGMENT
IN WITNESS WHEREOF, the parties have executed this Mortgage as of the Effective Date.
BORROWER:
[Borrower Name]
By: ____
Name: ____
Title (if applicable): _______
LENDER:
[Lender Name]
By: ____
Name: ____
Title: _________
NOTARIAL ACKNOWLEDGMENT
Commonwealth of Pennsylvania
County of [COUNTY]
On this _ day of _, 20__, before me, the undersigned notary public, personally appeared _____, who acknowledged himself/herself to be the [TITLE] of [LENDER/BORROWER NAME], and that he/she as such officer, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing on behalf of said entity.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public
My commission expires: _______
EXHIBIT A – Legal Description of Property
[INSERT FULL METES AND BOUNDS OR LOT-BLOCK DESCRIPTION]
[// GUIDANCE: Attach additional exhibits as needed (e.g., Exhibit B – Assignment of Leases, Exhibit C – Environmental Indemnity). Confirm compliance with the Pennsylvania Recording Act, including mortgage tax affidavit (if any), municipal lien certificate, and applicable Act 6/Act 91 notices before initiating foreclosure.]