Form 11-3

Deed of Trust

[Home Equity Loan]

Notice of confidentiality rights: If you are a natural person, you may remove or strike any or all of the following information from any instrument that transfers an interest in real property before it is filed for record in the public records: your Social Security number or your driver’s license number.

The loan secured by this deed of trust is an extension of credit as defined by Section 50(a)(6), Article XVI, of the Texas Constitution.

Basic Information

Date:

Grantor:

Grantor’s Mailing Address:

Trustee:

Trustee’s Mailing Address:

Lender:

Lender’s Mailing Address:

Home Equity Extension of Credit (Promissory Note)

Date:

Original principal amount:

Borrower:

Lender:

Maturity date:

Property (including any improvements):

Prior Lien: [include recording information]

Other Exceptions to Conveyance and Warranty:

A.Granting Clause

For value received and to secure payment of the Home Equity Extension of Credit, Grantor conveys the Property to Trustee in trust. Grantor warrants and agrees to defend the title to the Property, subject to the Other Exceptions to Conveyance and Warranty. On pay­ment of the Home Equity Extension of Credit and all other amounts secured by this deed of trust, this deed of trust will have no further effect.

B.Grantor’s Obligations

Grantor agrees to—

B.1.keep the Property in good repair and condition;

B.2.pay all taxes and assessments on the Property before delinquency, not authorize a taxing entity to transfer its tax lien on the Property to anyone other than Lender, and not request a deferral of the collection of taxes pursuant to section 33.06 of the Texas Tax Code;

B.3.defend title to the Property subject to the Other Exceptions to Conveyance and Warranty and preserve the lien’s priority as it is established in this deed of trust;

B.4.maintain, in a form acceptable to Lender, an insurance policy that—

a.covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Lender approves a smaller amount in writing;

b.contains an 80 percent coinsurance clause;

c.provides fire and extended coverage, including windstorm coverage;

d.protects Lender with a standard mortgage clause;

e.provides flood insurance at any time the Property is in a flood hazard area; and

f.contains such other coverage as Lender may reasonably require;

B.5.comply at all times with the requirements of the 80 percent coinsurance clause;

B.6.deliver the insurance policy to Lender within ten days of the date of this deed of trust and deliver renewals to Lender at least fifteen days before expiration;

B.7.obey all laws, ordinances, and restrictive covenants applicable to the Property;

B.8.keep any buildings occupied as required by the insurance policy; and

B.9.if the lien of this deed of trust is not a first lien, pay or cause to be paid all prior lien notes and abide by or cause to be abided by all prior lien instruments.

C.Lender’s Rights

C.1.Lender may appoint in writing a substitute trustee, succeeding to all rights and responsibilities of Trustee.

C.2.If the proceeds of the Home Equity Extension of Credit are used to pay any debt secured by prior liens, Lender is subrogated to all the rights and liens of the holders of any debt so paid.

C.3.Lender may apply any proceeds received under the insurance policy either to reduce the Home Equity Extension of Credit or to repair or replace damaged or destroyed improvements covered by the policy. If Lender reasonably determines that repairs to the improvements are economically feasible, Lender will make the insurance proceeds available to Grantor for repairs.

C.4.Notwithstanding the terms of the Home Equity Extension of Credit to the con­trary, and unless applicable law prohibits, all payments received by Lender from Grantor under the Home Equity Extension of Credit or this deed of trust may, at Lender’s discretion, be applied first to amounts payable under this deed of trust and then to amounts due and pay­able to Lender under the Home Equity Extension of Credit, to be applied to principal or inter­est in the order Lender in Lender’s discretion determines.

C.5.If Grantor fails to perform any of Grantor’s obligations, including obligations contained in the Home Equity Extension of Credit or any instrument securing the Home Equity Extension of Credit, Lender may perform those obligations and be reimbursed by Grantor on demand for any amounts so paid, including attorney’s fees, plus interest on those amounts from the dates of payment at the rate stated in the Home Equity Extension of Credit for matured, unpaid amounts. The amount to be reimbursed will be secured by this deed of trust.

C.6.If there is a default in the payment of the Home Equity Extension of Credit or if Grantor fails to perform any of Grantor’s obligations in any instrument securing the Home Equity Extension of Credit, and the default continues after any required notice of default and time allowed to cure, Lender may—

a.declare the unpaid principal balance and earned interest on the Home Equity Extension of Credit immediately due; and

b.foreclose this lien under any proceeding authorized by the Texas Rules of Civil Procedure and other applicable law.

C.7.The lien of this deed of trust may be foreclosed only by court order. On obtain­ing a court order allowing a foreclosure of this lien under this deed of trust and the Texas Property Code as then in effect, Lender may—

a.direct Trustee to foreclose this lien, in which case Lender or Lender’s agent will cause notice of the foreclosure sale to be given as provided by the Texas Property Code as then in effect; and

b.purchase the Property at any foreclosure sale by offering the highest bid and then have the bid credited on the Home Equity Extension of Credit.

C.8.Lender may remedy any default without waiving it and may waive any default without waiving any prior or subsequent default.

D.Trustee’s Rights and Duties

If directed by Lender to foreclose this lien, Trustee will—

D.1.either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then in effect;

D.2.sell and convey all or part of the Property “AS IS” to the highest bidder for cash with a general warranty binding Grantor, subject to the Prior Lien and to the Other Exceptions to Conveyance and Warranty and without representation or warranty, express or implied, by Trustee;

D.3.from the proceeds of the sale, pay, in this order—

a.expenses of foreclosure, including a reasonable commission to Trustee;

b.to Lender, the full amount of principal, interest, attorney’s fees, and other charges due and unpaid;

c.any amounts required by law to be paid before payment to Grantor; and

d.to Grantor, any balance; and

D.4.be indemnified by Lender against all costs, expenses, and liabilities incurred by Trustee for acting in the execution or enforcement of the trust created by this deed of trust, which includes all court and other costs, including attorney’s fees, incurred by Trustee in defense of any action or proceeding taken against Trustee in that capacity.

E.General Provisions

E.1.If any of the Property is sold under this deed of trust, Grantor must immediately surrender possession to the purchaser. If Grantor does not, Grantor will be a tenant at suffer­ance of the purchaser, subject to an action for forcible detainer.

E.2.Recitals in any trustee’s deed conveying the Property will be presumed to be true.

E.3.Proceeding under this deed of trust, filing suit for foreclosure, filing application for expedited foreclosure proceeding, or pursuing any other remedy will not constitute an election of remedies.

E.4.This lien will remain superior to liens later created even if the time of payment of all or part of the Home Equity Extension of Credit is extended or part of the Property is released.

E.5.If any portion of the Home Equity Extension of Credit cannot be lawfully secured by this deed of trust, payments will be applied first to discharge that portion to the extent permitted by law.

E.6.Grantor assigns to Lender all amounts payable to or received by Grantor from condemnation of all or part of the Property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the Property. After deduct­ing any expenses incurred, including attorney’s fees and court and other costs, Lender will either release any remaining amounts to Grantor or apply such amounts to reduce the Home Equity Extension of Credit. Lender will not be liable for failure to collect or to exercise dili­gence in collecting any such amounts. Grantor will immediately give Lender notice of any actual or threatened proceedings for condemnation of all or part of the Property.

E.7.Interest on the debt secured by this deed of trust will not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or per­mitted prepayment, any such excess will be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. Loan charges, fees, or similar amounts other than interest will not exceed the maximum amount or rate that may be contracted for, taken, reserved, charged, or received under law. Any loan charges, fees, or similar amounts other than interest in excess of that maximum rate or amount will be credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides any conflicting provisions in this and all other instruments concerning the Home Equity Extension of Credit.

E.8.In no event may this deed of trust secure payment of any debt that may not law­fully be secured by a lien on real estate or create a lien otherwise prohibited by law.

E.9.Grantor waives all demand for payment, presentation for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, protest, and notice of pro­test to the extent permitted by applicable law.

E.10.Grantor agrees to pay reasonable attorney’s fees, trustee’s fees, and court and other costs of enforcing Lender’s rights under this deed of trust if an attorney [include if the transaction is a secondary mortgage loan: who is not an employee of Lender] is retained for its enforcement.

E.11.If any provision of this deed of trust is determined to be invalid or unenforce­able, the validity or enforceability of any other provision will not be affected.

E.12.The term Home Equity Extension of Credit includes all extensions and renewals of the Home Equity Extension of Credit and all amounts secured by this deed of trust.

E.13.This deed of trust binds, benefits, and may be enforced by the successors in interest of all parties.

E.14.If Grantor and Borrower are not the same person, the term Grantor includes Borrower.

E.15.Grantor represents to Lender that all of the Property is Grantor’s homestead.

E.16.The Home Equity Extension of Credit will conform strictly to the provisions of the Texas Constitution applicable to extensions of credit as defined by Tex. Const. art. XVI, § 50(a)(6). In no event will Grantor or Lender be obligated to perform any act or be bound by any requirement that would conflict therewith. If any term, obligation, privilege, or right of the Home Equity Extension of Credit, this deed of trust, any instrument to which Lender is subrogated hereunder, any instrument renewed or extended hereby, or any other document executed in connection with the Home Equity Extension of Credit fails to conform to Tex. Const. art. XVI, § 50(a)(6), or in the event Lender or any holder of the Home Equity Exten­sion of Credit fails to comply with Tex. Const. art. XVI, § 50(a), then, to the extent provided by applicable law, such violation may be cured as set out in Tex. Const. art. XVI, § 50(a)(6).

   
[Name of grantor]