Conventional Mortgage Income Property
1. Preamble. THIS MORTGAGE, made [date] between [name] (Mortgagor), and [name], a [lending institution] having an office at [address] in [county, state] (Mortgagee).
2. Mortgage and Description of Property. WITNESSETH, that to secure the payment of an indebtedness in the principal sum of ---------- dollars ($----------), which sum is to be paid, with interest thereon, according to a bond or obligation bearing even date herewith, Mortgagor mortgages to Mortgagee:
[description of mortgaged real estate]
Title to Street. TOGETHER with all the right, title, and interest of Mortgagor, of, in, and to the land lying in the street, in front of, and adjoining the premises to the center line thereof.
Fixtures, Personal Property, Etc. TOGETHER with the appurtenances and all the estate and rights of Mortgagor in and to the premises and together with all fixtures and articles of personal property attached to or used in connection with said premises, or which may hereafter be attached to or used in connection with the premises, all of which are covered by this Mortgage.
Awards. TOGETHER also with all awards made before or after the date of this Instrument to the present and all subsequent owners of the premises, including any award and awards for change of grade of any street affecting the premises. Any award is assigned to Mortgagee who is authorized and empowered to collect and receive any award, to give proper receipts and acquittances for them, and to apply the proceeds of any award toward the payment of the amount owing on this Mortgage, even though the amount owing on this Mortgage may not then be due and payable. Mortgagor, for Mortgagor, Mortgagor's heirs, and all subsequent owners of said premises, covenants and agrees with Mortgagee, Mortgagee's successors and assigns, that upon request by the holder of this Mortgage, Mortgagor, Mortgagor's heirs, and all subsequent owners of said premises will make, execute, and deliver any and all assignments and other instruments sufficient for the purpose of assigning any award to the holder of this Mortgage, free, clear, and discharged of any encumbrances.
TO HAVE AND TO HOLD the premises with the appurtenances unto Mortgagee, to Mortgagee's own proper use and benefit forever.
3. Mortgagor's Obligations. Mortgagor further covenants with Mortgagee as follows:
a. Pay the Mortgage Debt. Mortgagor will pay the indebtedness as hereinbefore provided.
b. Escrow Deposit for Taxes, Insurance, Etc.; Late Charges. To protect more fully the security of this Mortgage, Mortgagor will, together with and in addition to the monthly payments of principal and interest payable under the terms of the bond, pay to Mortgagee on the first day of each month until the bond is fully paid, an installment of the taxes, assessments and water rates levied or to be levied against the premises covered by this Mortgage and an installment of premium that will become due and payable to renew the fire insurance covering the mortgaged premises, in amounts and in companies satisfactory to Mortgagee. The installments shall be equal to the estimated premiums for insurance, taxes, and assessments and water rates next due (as estimated by Mortgagee) less all installments already paid, divided by the number of months that are to elapse prior to one month before the date when the premiums, taxes, and assessments and water rates will become due. Mortgagee shall hold the monthly payment in trust and apply them against the premiums and taxes, assessments and water rates when due. The escrow payments and all payments to be made under the bond secured by this Mortgage shall be added together, and the total amount shall be paid by Mortgagor each month in a single payment, to be applied by Mortgagee to the following items in the following order:
i. Taxes, assessments, water rates, fire and other hazard insurance premiums.
ii. Interest on the bond secured by this Mortgage.
iii. Amortization of the principal of the bond. Any deficiency in the amount of any aggregate monthly payment shall, unless made good by Mortgagor before the due date of the next payment, constitute a default under this Mortgage. In the event that any payment shall become overdue for a period in excess of [number] days, a late charge of ---------- cents ($0----------.) for each dollar ($1) overdue may be charged by the holder of this Mortgage for the purpose of defraying the expense incident to handling a delinquent payment.
c. Overages or Deficiencies in Escrow Deposit; Application of Escrow Funds to Unpaid Portions of Mortgage Debt. If the total of the payments by Mortgagor for taxes, assessments, water rates, and insurance premiums exceeds the payments actually made by Mortgagee for taxes, assessments, water rates, or insurance premiums, as the case may be, the excess shall be credited by Mortgagee to subsequent payments of the same nature to be made by Mortgagor. If, however, the monthly payments made by Mortgagor are not sufficient to pay taxes, assessments, water rates, and insurance premiums when they become due and payable, then Mortgagor shall pay to Mortgagee any amount necessary to make up the deficiency, on or before the date when payment of taxes, assessments, water rates, or insurance premiums becomes due. If Mortgagor tenders to Mortgagee full payment of the entire indebtedness represented by the bond secured by this Mortgage and in accordance with the bond's terms, Mortgagee shall credit to Mortgagor's account any balance remaining in the funds accumulated by Mortgagee for the payment of taxes, assessments, water rates, and fire insurance premiums. If there is a default under any of the provisions of this Mortgage and an action or proceeding is commenced to foreclose this Mortgage, Mortgagee is authorized and empowered to apply, at the time of the commencement of the action or proceeding, or at any time thereafter, the balance then remaining in the funds accumulated for taxes, assessments, water rates, and insurance premiums as a credit against the amount of principal then remaining unpaid under the bond.
d. Payment of Taxes, Assessments, Etc., Not Covered by Escrow Deposit. Mortgagor will pay all taxes, assessments, water rates, and other governmental or municipal charges, fines, or impositions, for which provision has not been made by way of monthly payments. If Mortgagor fails to make timely payment of these items, Mortgagee may pay them on Mortgagor's behalf and at Mortgagor's expense. Mortgagor will promptly deliver the official receipts of payment to Mortgagee.
e. Maintain Mortgaged Premises. No building on premises shall be removed, altered, or demolished and no fixtures or personal property covered by this Mortgage shall be removed or demolished, without Mortgagee's written consent. Mortgagor, for Mortgagor, Mortgagor's heirs, and all subsequent owners of the premises, covenants and agrees with Mortgagee and Mortgagee's successors and assigns, that Mortgagor will keep and maintain the mortgaged premises in a good and complete state of repair and will promptly comply with all the requirements of the federal, state, and municipal governments or any of their departments or bureaus having jurisdiction. Should Mortgagor fail to comply with any of these requirements, Mortgagee may enter the premises and make the repairs that are necessary for the purpose of complying with any governmental or departmental requirements, and the cost of the repairs shall be a lien on the premises secured by this Mortgage and shall be payable on demand, with interest at the rate of ---------- percent (----------%) per annum. Neither the value of the mortgaged premises nor the lien of this Mortgage will be diminished or impaired in any way by any act or omission of Mortgagor, Mortgagor's heirs, or by any subsequent owner of the premises, and Mortgagor will not do or permit to be done to, in, upon or about the premises, anything that may in any way substantially impair their value, or substantially weaken, diminish, or impair the security of this Mortgage.
f. Warranty of Title. Mortgagor warrants the title to the premises.
g. Foreclosure Sale in One Parcel. In the event of a foreclosure of this Mortgage, the premises may be sold in one parcel despite any provision of law that provides otherwise.
h. Adequate Insurance. Mortgagor will deep the buildings now or hereafter erected on the premises insured as may be required by Mortgagee against loss by fire and other hazards, casualties, and contingencies, in amounts and in companies and for periods as Mortgagee shall require. Upon failure to so insure, Mortgagee may have insurance written and pay the premium. If this occurs, the principal sum secured by this Mortgage together with the amount paid by Mortgagee for insurance shall at Mortgagee's option immediately become due and payable. Mortgagor will give Mortgagee immediate notice by mail of any fire, damage, or other casualty to the premises or of any conveyance, transfer, or change of ownership of the premises. If the premises or any part of them are damaged by fire or other hazard, the amounts paid by any insurance company pursuant to the contract of insurance shall, to the extent of the indebtedness then remaining unpaid, be paid to Mortgagee and, at Mortgagee's option, may be applied to the debt or released for the repair or rebuilding of the premises.
i. Mortgagor's Default. The whole of the principal sum and of any other sums of money secured by this Mortgage shall, forthwith or thereafter, at Mortgagee's option, become due and payable upon the happening of either of the following events, even it they are remedied by Mortgagee:
i. Failure to pay in full any aggregate monthly payment before the due date of the next monthly payment
ii. Failure of Mortgagor to perform or comply with any other covenant, agreement, term, or condition of this Mortgage or of the bond secured by this Mortgage
j. Change of Law. In the event of the passage after the date of this Mortgage of any law deducting from the value of land for the purpose of taxing any lien on it, or changing in any way the laws for the taxation of mortgages or debts secured by mortgages for state or local purposes, or the manner of collecting of such taxes, so as to affect this Mortgage, the holder of this Mortgage and of the debt that it secures, shall have the right to give [number] days' written notice to the owner of the mortgaged premises requiring the payment of the mortgage debt. If the notice is given, the debt shall become due, payable, and collectible at the expiration of the [number] days.
k. Assignment of Rents and Profits to Mortgagee. Should any default occur, the rents and profits of the premises and all leases existing at the time of the default are assigned to Mortgagee as further security for the payment of the indebtedness, and Mortgagee is empowered, upon default, to enter upon and take possession of the premises and to lease the premises and collect all the rents that are due or become due and to apply them, after payment of all necessary charges and expenses, on account of the indebtedness. A notice of default and of the entry and taking possession of the premises by Mortgagee, served upon the record owner of the premises personally, or by mail addressed to the owner at his [or her] last known address, shall be deemed to place Mortgagee in possession of the premises. Mortgagor, for Mortgagor, Mortgagor's heirs, and all subsequent owners of said premises, further covenants and agrees that if Mortgagor or any subsequent owner of the premises occupies them when an action or proceeding commenced to foreclose this Mortgage, the occupant shall be deemed to be Mortgagee's tenant, and Mortgagor or any subsequent owner agrees to pay in advance upon demand to the holder of this Mortgage as a reasonable monthly rental for the premises an amount at least equivalent to one twelfth of the total of the twelve monthly installments payable in the then-current year, plus the actual amount of the annual taxes, assessments, water rates, and insurance premiums for that year not covered by the monthly payments. If the monthly rental is not paid, Mortgagor or subsequent owner agrees to vacate and surrender possession of the premises, and Mortgagee shall be empowered to dispossess Mortgagor or any subsequent owner of the premises by the usual summary proceedings. This covenant shall become effective immediately after the happening of any default, solely on the determination of the holder of this Mortgage, who shall give notice of the determination to Mortgagor or subsequent owner of the mortgaged premises. In case of foreclosure and the appointment of a receiver of the rents, this covenant shall inure to the benefit of the receiver.
l. Appointment of Receiver of Rents and Profits. Mortgagee, Mortgagee's successors, or assigns, in any action to foreclose this Mortgage, shall be entitled as a matter of right and without regard to the value of the premises or Mortgagor's solvency or that of any owner of the premises, upon application to any court having jurisdiction, to the appointment of a receiver of the rents and profits of the premises and of the rental value of the portions of the premises occupied by the owner at the time, which the owner agrees to pay, without notice to Mortgagor, Mortgagor's heirs, administrators, successors, or assigns. In such event, the rents and profits and rental value are assigned to the holder of this Mortgage as further security for the payment of the indebtedness.
m. Actions Involving Mortgagee. If any action or proceeding is commenced (except an action or proceeding to foreclose this Mortgage or to collect the debt secured by it), to which action or proceeding the holder of this Mortgage is made a party, or in which it becomes necessary to defend or uphold the lien of this Mortgage, all sums incurred by the holder of this Mortgage for the expense of any litigation to prosecute or defend the rights and lien created by this Mortgage (including reasonable counsel fees), shall be paid by Mortgagor, together with interest at the rate of ---------- percent (----------%) per annum, and any such sum and interest shall be a lien on the premises, prior to any right, or title to, interest in, or claim upon the premises attaching or accruing subsequent to the lien of this Mortgage and shall be deemed to be secured by this Mortgage and by the bond that it secures.
n. No Assignment of Rents by Mortgagor. Mortgagor will not assign the rents or any part of the rents of the mortgaged premises without first obtaining Mortgagee's written consent to the assignment.
o. Mortgagor to Furnish Statement of Balance Due. Mortgagor within [reasonable number, e.g., five] days upon request in person or within [reasonable number, e.g., ten] days upon request by mail will furnish a statement of the amount due on this Mortgage.
p. Service of Notices and Demands. Notices and demands or requests must be in writing and may be served in person or by mail.
4. Consent of Stockholders of Corporate Mortgagor. This Mortgage has been consented to by at least two thirds of the stockholders of any corporate mortgagor.
5. Financial Statement. Mortgagor will annually furnish a statement of financial condition consisting of a balance sheet and statement of operations.