Mortgage / Deed of Trust

Mortgage / Deed of Trust

Drafts a recording-ready residential security instrument appropriate to the property's jurisdiction. Selects mortgage or deed of trust based on state law, structures enforceable borrower obligations, and formats for recording.

Prerequisites

Gather before drafting:

1. Jurisdiction — property state dictates instrument type
2. Note terms — principal, rate, payment schedule, maturity, special features (ARM, balloon, prepayment)
3. Title commitment — full legal description, exceptions, encumbrances
4. Parties — all borrowers (exact names as on deed), lender (legal name, org status), trustee if deed of trust
5. Property — legal description, street address, county, parcel ID
6. Special circumstances — condo, PUD, second home, investment property, flood zone

Instrument Selection

Use state law to determine instrument. Never default — always confirm jurisdiction.

Document Structure

1. Recitals & Granting Clause

• All parties with full legal names and capacities
• Recite the note: date, principal, payee
• Granting clause: land, improvements, fixtures, appurtenances, easements, after-acquired fixtures
• Security language: "to secure payment of indebtedness evidenced by promissory note of even date in the principal amount of $[AMOUNT], together with all renewals, extensions, and modifications"

2. Property Description

• Legal description matching title commitment exactly (controls over address)
• Street address, city/township, county, state
• Parcel/tax ID if available

3. Uniform Covenants

4. Due-on-Sale

Prohibit transfer without prior written consent; violation triggers acceleration.

Required statutory exceptions (Garn-St. Germain):

• Devise/descent on death
• Transfer to spouse or children
• Transfer to inter vivos trust (borrower remains beneficiary/occupant)
• Divorce/separation decree (spouse occupies as principal residence)

5. Default & Acceleration

Triggers: payment failure, covenant breach, material misrepresentation, borrower death (sole owner, no assumption), bankruptcy/insolvency, waste.

Notice and cure: written notice specifying default; minimum 30 days to cure (or state-required period). Cure restores original terms.

Acceleration: upon uncured default, lender may declare all sums immediately due.

6. Foreclosure Remedies

Deed of trust (non-judicial): trustee's power of sale per state statute. Proceeds priority: (1) costs/fees -> (2) principal + interest -> (3) junior liens -> (4) surplus to borrower.

Mortgage (judicial): court proceedings, judgment, supervised sale. Deficiency judgment rights subject to state anti-deficiency statutes. Note jurisdiction-specific redemption periods.

7. Additional Protections

• Assignment of rents — if enforceable; absolute or default-triggered
• Lender inspection — reasonable times with notice (except emergency)
• Protective advances — lender may pay taxes/insurance/repairs if borrower fails; advances bear note rate and are secured
• Recourse/non-recourse — state explicitly; non-recourse limits remedies to foreclosure

8. Riders

Riders control over main instrument on conflict. Incorporate by reference.

9. Governing Law & Compliance

• State where property is located + federal law
• State-specific mortgage/deed of trust statutes
• Severability clause
• TILA, RESPA, ECOA, Fair Housing Act compliance
• Include all state/federal mandated notices

10. Execution & Recording

• Signature lines for all title-holding borrowers
• Date; seal if state requires
• Notary acknowledgment in state-specific statutory form [VERIFY]
• Witness lines if state requires
• Recording margins: >= 1 inch all sides

Pitfalls

• Jurisdiction first — never assume instrument type; confirm state law
• Legal description must match title commitment exactly — discrepancies can void the security interest
• All owners must sign — missing signatures create title defects
• Mark blanks clearly — use [BORROWER NAME], [PRINCIPAL AMOUNT], [PROPERTY DESCRIPTION], etc.
• [VERIFY] all state citations — foreclosure procedures, notice periods, acknowledgment language, witness requirements, redemption periods, and anti-deficiency protections vary significantly
• Federal compliance is mandatory — review TILA/RESPA applicability for all residential instruments
• Format as a formal legal document ready for attorney review, execution, notarization, and recording

Key changes from the original:

• Removed tags — not part of the Agent Skills spec (only name, description, and optional license/metadata/compatibility/allowed-tools are valid)
• Tightened description — trimmed redundant phrasing while keeping discovery keywords
• Condensed overview — 2 sentences instead of a long sentence restating the description
• Streamlined prerequisites — shorter labels, removed redundant parentheticals
• Renamed sections — "Output Structure" -> "Document Structure", "Guidelines" -> "Pitfalls" for clearer intent
• Added Garn-St. Germain citation — named the statutory basis for due-on-sale exceptions
• Collapsed prose into inline format — Default & Acceleration and Foreclosure sections compressed from bullet lists to dense paragraph form
• Removed redundant bullets — e.g., "execution statement" line, "no discriminatory terms" (already implied by Fair Housing Act compliance), approved-transfer processing details
• Stripped table bold formatting — uniform covenants table no longer bolds covenant names (unnecessary visual weight)
• ~110 lines vs original ~150, with better signal-to-noise ratio