B.2 SAMPLE PROMISSORY NOTE (FIXED) This Security Instrument (But Not Prior to Accelera- Tion Under Section 18 Unless Applicable Law Provides NOTE Otherwise)

Appx. B  FORECLOSURE PREVENTION COUNSELING

including but not limited to, any spilling, leaking, dis- 23. Release. Upon payment of all sums secured by charge, release or threat of release of any Hazardous this Security Instrument, Lender shall discharge this Substance, and (c) any condition caused by the presence, Security Instrument. Borrower shall pay any recordation use or release of a Hazardous Substance which adversely costs. Lender may charge Borrower a fee for releasing this affects the value of the Property. If Borrower learns, or Security Instrument, but only if the fee is paid to a third is notified by any governmental or regulatory authority, party for services rendered and the charging of the fee is or any private party, that any removal or other remedia- permitted under Applicable Law. tion of any Hazardous Substance affecting the Property 24. Waivers. Borrower waives all rights of homestead is necessary, Borrower shall promptly take all necessary exemption in the Property and relinquishes all rights of remedial actions in accordance with Environmental Law. curtesy and dower in the Property. Nothing herein shall create any obligation on Lender for BY SIGNING BELOW, Borrower accepts and agrees an Environmental Cleanup. to the terms and covenants contained in this Security NON-UNIFORM COVENANTS. Borrower and Instrument and in any Rider executed by Borrower and Lender further covenant and agree as follows: recorded with it. 22. Acceleration; Remedies. Lender shall give Witnesses: notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in B.2 SAMPLE PROMISSORY NOTE (FIXED) this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides NOTE otherwise). The notice shall specify: (a) the default; 1. BORROWER’S PROMISE TO PAY (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given In return for a loan that I have received, I promise to pay to Borrower, by which the default must be cured; and U.S. $______(this amount is called (d) that failure to cure the default on or before the “Principal”), plus interest, to the order of the Lender. date specified in the notice may result in accelera- The Lender is ______. I will tion of the sums secured by this Security Instrument make all payments under this Note in the form of cash, and sale of the Property. The notice shall further check or money order. inform Borrower of the right to reinstate after accel- I understand that the Lender may transfer this Note. eration and the right to bring a court action to assert The Lender or anyone who takes this Note by transfer the non-existence of a default or any other defense and who is entitled to receive payments under this Note of Borrower to acceleration and sale. If the default is called the “Note Holder.” is not cured on or before the date specified in the 2. INTEREST notice, Lender at its option may require immediate Interest will be charged on unpaid principal until the payment in full of all sums secured by this Security full amount of Principal has been paid. I will pay interest Instrument without further demand and may invoke at a yearly rate of ______%. the STATUTORY POWER OF SALE and any other The interest rate required by this Section 2 is the rate remedies permitted by Applicable Law. Lender shall I will pay both before and after any default described in be entitled to collect all expenses incurred in pursu- Section 6(B) of this Note. ing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys’ fees 3. PAYMENTS and costs of title evidence. (A) Time and Place of Payments If Lender invokes the STATUTORY POWER OF I will pay principal and interest by making a payment SALE, Lender shall mail a copy of a notice of sale to every month. Borrower, and to other persons prescribed by Appli- I will make my monthly payment on the cable Law, in the manner provided by Applicable Law. ______day of each month beginning on Lender shall publish the notice of sale, and the Prop- ______, ______. I will make erty shall be sold in the manner prescribed by Appli- these payments every month until I have paid all of the cable Law. Lender or its designee may purchase the principal and interest and any other charges described Property at any sale. The proceeds of the sale shall below that I may owe under this Note. Each monthly be applied in the following order: (a) to all expenses payment will be applied as of its scheduled due date of the sale, including, but not limited to, reasonable and will be applied to interest before Principal. If, on attorneys’ fees; (b) to all sums secured by this Security ______, 20___, I still owe amounts Instrument; and (c) any excess to the person or persons under this Note, I will pay those amounts in full on that legally entitled to it. date, which is called the “Maturity Date.” 320

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I will make my monthly payments at ______amount by a certain date, the Note Holder may require ______or at a different place if required by the me to pay immediately the full amount of Principal Note Holder. which has not been paid and all the interest that I owe (B) Amount of Monthly Payments on that amount. That date must be at least 30 days after My monthly payment will be in the amount of U.S. the date on which the notice is mailed to me or delivered $______. by other means. (D) No Waiver By Note Holder 4. BORROWER’S RIGHT TO PREPAY Even if, at a time when I am in default, the Note I have the right to make payments of Principal at any Holder does not require me to pay immediately in full as time before they are due. A payment of Principal only is described above, the Note Holder will still have the right known as a “Prepayment.” When I make a Prepayment, to do so if I am in default at a later time.

I will tell the Note Holder in writing that I am doing so. (E) Payment of Note Holder’s Costs and Expenses APPENDIX B I may not designate a payment as a Prepayment if I have If the Note Holder has required me to pay immedi- not made all the monthly payments due under the Note. ately in full as described above, the Note Holder will have I may make a full Prepayment or partial Prepayments the right to be paid back by me for all of its costs and without paying a Prepayment charge. The Note Holder expenses in enforcing this Note to the extent not prohib- will use my Prepayments to reduce the amount of Princi- ited by applicable law. Those expenses include, for exam- pal that I owe under this Note. However, the Note Holder ple, reasonable attorneys’ fees. may apply my Prepayment to the accrued and unpaid interest on the Prepayment amount, before applying my 7. GIVING OF NOTICES Prepayment to reduce the Principal amount of the Note. Unless applicable law requires a different method, any If I make a partial Prepayment, there will be no changes notice that must be given to me under this Note will be in the due date or in the amount of my monthly payment given by delivering it or by mailing it by first class mail to unless the Note Holder agrees in writing to those changes. me at the Property Address above or at a different address if I give the Note Holder a notice of my different address. 5. LOAN CHARGES Any notice that must be given to the Note Holder If a law, which applies to this loan and which sets under this Note will be given by delivering it or by mail- maximum loan charges, is finally interpreted so that the ing it by first class mail to the Note Holder at the address interest or other loan charges collected or to be collected stated in Section 3(A) above or at a different address if I in connection with this loan exceed the permitted lim- am given a notice of that different address. its, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted 8. OBLIGATIONS OF PERSONS UNDER THIS NOTE limit; and (b) any sums already collected from me which If more than one person signs this Note, each person is exceeded permitted limits will be refunded to me. The fully and personally obligated to keep all of the promises Note Holder may choose to make this refund by reducing made in this Note, including the promise to pay the full the Principal I owe under this Note or by making a direct amount owed. Any person who is a guarantor, surety or payment to me. If a refund reduces Principal, the reduc- endorser of this Note is also obligated to do these things. tion will be treated as a partial Prepayment. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser 6. BORROWER’S FAILURE TO PAY AS REQUIRED of this Note, is also obligated to keep all of the prom- (A) Late Charge for Overdue Payments ises made in this Note. The Note Holder may enforce its If the Note Holder has not received the full amount of rights under this Note against each person individually any monthly payment by the end of ______or against all of us together. This means that any one of calendar days after the date it is due, I will pay a late us may be required to pay all of the amounts owed under charge to the Note Holder. The amount of the charge will this Note. be ______% of my overdue payment of principal and interest. I will pay this late charge promptly but only 9. WAIVERS once on each late payment. I and any other person who has obligations under (B) Default this Note waive the rights of Presentment and Notice If I do not pay the full amount of each monthly pay- of Dishonor. “Presentment” means the right to require ment on the date it is due, I will be in default. the Note Holder to demand payment of amounts due. (C) Notice of Default “Notice of Dishonor” means the right to require the Note If I am in default, the Note Holder may send me a Holder to give notice to other persons that amounts due written notice telling me that if I do not pay the overdue have not been paid.

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10. UNIFORM SECURED NOTE and who is entitled to receive payments under this Note This Note is a uniform instrument with limited is called the “Note Holder.” variations in some jurisdictions. In addition to the pro- 2. INTEREST tections given to the Note Holder under this Note, a Interest will be charged on unpaid principal until the Mortgage, Deed of Trust, or Security Deed (the “Security full amount of Principal has been paid. I will pay inter- Instrument”), dated the same date as this Note, protects est at a yearly rate of ______%. The interest the Note Holder from possible losses which might result rate I will pay will change in accordance with Section 4 of if I do not keep the promises which I make in this Note. this Note. The interest rate required by this Section 2 and That Security Instrument describes how and under what Section 4 of this Note is the rate I will pay both before and conditions I may be required to make immediate pay- after any default described in Section 7(B) of this Note. ment in full of all amounts I owe under this Note. Some of those conditions are described as follows: 3. PAYMENTS If all or any part of the Property or any Interest in (A) Time and Place of Payments the Property is sold or transferred (or if Borrower is not I will pay principal and interest by making a payment a natural person and a beneficial interest in Borrower is every month. sold or transferred) without Lender’s prior written con- I will make my monthly payment on the first day of sent, Lender may require immediate payment in full of each month beginning on ______, ______. I will all sums secured by this Security Instrument. However, make these payments every month until I have paid all of this option shall not be exercised by Lender if such exer- the principal and interest and any other charges described cise is prohibited by Applicable Law. below that I may owe under this Note. Each monthly If Lender exercises this option, Lender shall give Bor- payment will be applied as of its scheduled due date rower notice of acceleration. The notice shall provide a and will be applied to interest before Principal. If, on period of not less than 30 days from the date the notice ______, 20______, I still owe amounts under is given in accordance with Section 15 within which Bor- this Note, I will pay those amounts in full on that date, rower must pay all sums secured by this Security Instru- which is called the “Maturity Date.” ment. If Borrower fails to pay these sums prior to the I will make my monthly payments at ______expiration of this period, Lender may invoke any remedies ______or at a different place if required by the permitted by this Security Instrument without further Note Holder. notice or demand on Borrower. (B) Amount of My Initial Monthly Payments WITNESS THE HAND(S) AND SEAL(S) OF THE Each of my initial monthly payments will be in the UNDERSIGNED. amount of U.S. $______. This amount may change. (C) Monthly Payment Changes B.3 SAMPLE PROMISSORY NOTE Changes in my monthly payment will reflect changes (ADJUSTABLE) in the unpaid principal of my loan and in the interest ADJUSTABLE RATE NOTE rate that I must pay. The Note Holder will determine my new interest rate and the changed amount of my monthly (1 Year Treasury Index—Rate Caps) payment in accordance with Section 4 of this Note. THIS NOTE CONTAINS PROVISIONS ALLOW- ING FOR CHANGES IN MY INTEREST RATE 4. INTEREST RATE AND MONTHLY PAYMENT AND MY MONTHLY PAYMENT. THIS NOTE CHANGES LIMITS THE AMOUNT MY INTEREST RATE (A) Change Dates CAN CHANGE AT ANY ONE TIME AND THE The interest rate I will pay may change on the first day MAXIMUM RATE I MUST PAY. of ______, ______, and on that day every 12th month thereafter. Each date on which my interest 1. BORROWER’S PROMISE TO PAY rate could change is called a “Change Date.” In return for a loan that I have received, I promise to (B) The Index pay U.S. $ ______(this amount is called Beginning with the first Change Date, my interest rate “Principal”), plus interest, to the order of the Lender. will be based on an Index. The “Index” is the weekly aver- The Lender is ______. I will make all age yield on United States Treasury securities adjusted payments under this Note in the form of cash, check or to a constant maturity of one year, as made available by money order. the Federal Reserve Board. The most recent Index figure I understand that the Lender may transfer this Note. available as of the date 45 days before each Change Date The Lender or anyone who takes this Note by transfer is called the “Current Index.” 322

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