mortgage deed of trust document

INVESTOR RIDER TO SECURITY INSTRUMENT
(To Be Recorded With The Security Instrument)

THIS IS A MODEL DOCUMENT FOR USE IN CONSTRUCTION LOAN TRANSACTIONS. THIS FORM IS PROVIDED AS AN EXAMPLE AND IS NOT VALID AND ENFORCEABLE IN ALL JURISDICTIONS. NOTE HOLDERS SHOULD CONSULT WITH LEGAL COUNSEL TO ENSURE THAT ALL FORMS USED TO ORIGINATE CONSTRUCTION TO PERMANENT MORTGAGES ARE APPROPRIATE, AND THAT ALL LEGAL INSTRUMENTS ARE COMPLETED CORRECTLY AND IN COMPLIANCE WITH APPLICABLE LAW.

NOTE HOLDER:

BORROWER:

PROPERTY:

THIS INVESTOR RIDER TO SECURITY INSTRUMENT is made this day of

, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed
of Trust or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Note (the "Note") to

(the "Note Holder") of the same date and covering the Property described in the Security Instrument and located at:

[Property Address]

ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Note Holder further covenant and agree as follows:

A. RENTS; ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; OTHER REMEDIES.

1. Definitions.

a. As used in this paragraph A, the term "Rents" means all of the rents, revenues, income, proceeds, profits and other benefits, whether now due, past due or to become due, paid or payable for using, leasing, licensing, possessing, residing in, or otherwise using the Property. The term "Rents" includes, without limitation, all rentals from tenants occupying the Property or any portion of the Property, all prepaid rent, all fees for parking, storage or other use of the Property, income from rental of personal property paid by such tenants to Borrower, and all security, pet or other deposits.

MULTISTATE INVESTOR RIDER TO SECURITY INSTRUMENT - Single-Family - Fannie Mae HOMESTYLE MODEL DOCUMENT Form 3738 11/01 (page 1 of 4 pages)

b. As used in this paragraph B, the term "Event of Default" means a default by Borrower under the terms of the Security Instrument.

2. Assignment of Rents; Appointment of Receiver; Other Remedies.

Borrower absolutely and unconditionally sells, assigns and transfers to Note Holder all of Borrower's rights, title and interest in and to Rents. Borrower authorizes Note Holder to collect, sue for and compromise Rents and directs each tenant of the Property to pay all Rents to, or as directed by, Note Holder. Borrower shall collect and receive all Rents on behalf of Note Holder, and shall pay to Note Holder all Rents collected for application to the amounts then due and payable under the Note and the Security Instrument and the current costs and expenses of owning, managing, operating and maintaining the Property, with the balance, so long as there exists no Event of Default, to be paid to the account of Borrower. Borrower hereby acknowledges Note Holder's unqualified right at any time to appoint any other person, including Note Holder, to collect Rents on behalf of Note Holder. BORROWER AND NOTE HOLDER INTEND THIS ASSIGNMENT OF RENTS TO BE IMMEDIATELY EFFECTIVE AND TO CONSTITUTE AN ABSOLUTE PRESENT AND UNCONDITIONAL ASSIGNMENT AND NOT AN ASSIGNMENT FOR ADDITIONAL SECURITY ONLY. THE PROVISIONS OF THIS PARAGRAPH A.2.a. SHALL CONTROL OVER ANY CONFLICTING OR INCONSISTENT TERM OR PROVISION OF THE SECURITY INSTRUMENT. IT SHALL NEVER BE NECESSARY FOR NOTE HOLDER TO INSTITUTE LEGAL PROCEEDINGS OF ANY KIND OR TO TAKE ANY FURTHER ACTION WHATSOEVER TO ENFORCE THE PROVISIONS OF THIS PARAGRAPH A.2.a. From and after the occurrence of any Event of Default, and without the necessity of Note Holder entering upon and taking and maintaining control of the Property directly, or by a court-appointed receiver, Note Holder shall without notice be entitled to all Rents as they become due and payable, including without limitation Rents then due and unpaid, and all Rents shall immediately upon the occurrence of the Event of Default be held by Borrower as trustee for the benefit of Note Holder only. Borrower shall pay to Note Holder upon demand all Rents to which Note Holder is entitled under the preceding sentence. At any time on or after the date of such demand, Note Holder may give, and Borrower hereby irrevocably authorizes Note Holder to give, notice to any or all tenants of the Property instructing them to pay all Rents to Note Holder. Immediately upon such event, Borrower shall deliver to Note Holder all documents, records and accounts relating to the Rents. No tenant shall be obligated to inquire further as to the occurrence or continuance of an Event of Default, and no tenant shall be obligated to pay to Borrower any amounts which are actually paid to Note Holder in response to such a notice. Any such notice by Note Holder shall be delivered to each tenant personally, by mail or by delivering such demand to each rental unit. Borrower shall not interfere with and shall cooperate with Note Holder's collection of such Rents.
Borrower represents and covenants to Note Holder that Borrower has not executed any prior assignment of Rents, and that Borrower has not performed, and Borrower covenants and agrees that Borrower will not perform, any acts and has not executed, and shall not execute, any instrument which would prevent Note Holder from exercising its rights under this paragraph A. Promptly upon request by Note Holder, Borrower agrees to execute and deliver such further assignments of Rents as Note Holder may from time to time require.

MULTISTATE INVESTOR RIDER TO SECURITY INSTRUMENT - Single-Family - Fannie Mae HOMESTYLE MODEL DOCUMENT Form 3738 11/01 (page 2 of 4 pages)

If an Event of Default has occurred and is continuing, Note Holder may, regardless of the adequacy of Note Holder's security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full control of the Property in order to perform all acts necessary and appropriate for the operation and maintenance of the Property, including without limitation, the execution, cancellation or modification of leases relating to the Property or any portion of the Property, the collection of all Rents, the making of repairs to the Property and the execution or termination of contracts providing for the management, operation or maintenance of the Property, for the purpose of protecting the Property or the security of the Security Instrument, or for such other purposes as Note Holder in its discretion may deem appropriate. Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Note Holder's security, without regard to Borrower's solvency and without the necessity of giving prior notice (oral or written) to Borrower, Note Holder may apply to any court having jurisdiction for the appointment of a receiver for the Property to take any or all of the actions set forth in the preceding sentence. If Note Holder elects to seek the appointment of a receiver for the Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Rider, expressly consents to the appointment of such receiver, including without limitation the appointment of a receiver ex parte if permitted by applicable law. Note Holder or the receiver, as the case may be, shall be entitled to receive a reasonable fee for managing the Property. Immediately upon appointment of a receiver or immediately upon Note Holder's entering upon and taking possession and control of the Property, Borrower shall surrender possession of the Property to Note Holder or the receiver, as the case may be, and shall deliver to Note Holder or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media) accounts, surveys, plans, and specifications relating to the Property. In the event Note Holder takes possession and control of the Property, Note Holder may exclude Borrower and its representatives from the Property. Borrower acknowledges and agrees that the exercise by Note Holder of any of the rights conferred under this paragraph A. shall not be construed to make Note Holder a mortgagee-in-possession of the Property.
In no event will this assignment of Rents reduce Borrower's debt to Note Holder except to the extent, if any, that funds are actually received by Note Holder pursuant to this assignment of Rents and applied to the sums secured by the Security Instrument in accordance with this paragraph A. The Rents shall be applied to the extent available in the following order of priority. First, to the costs and expenses, if any, of taking control and managing the Property and collecting the Rents, including without limitation attorneys' fees and fees of other professionals (including without limitation appraisers, accountants, and environmental assessment experts), Trustee's fees, if any, to the extent permitted by applicable law, receiver's fees, court expenses, premiums on receiver's bonds, costs of repair to the Property, premiums on insurance policies, taxes, assessments and other charges on the Property, and the costs of discharging any obligation or liability of Borrower as lessor or landlord of the Property. Second, to the sums secured by the Security Instrument, whether or not then due. Third, to Borrower. The Rents assigned under this paragraph A. shall be spread or deemed earned over the term of the loan evidenced by the Note. Borrower shall give Note Holder access to all books and records used in the operation and maintenance of the Property, but Note Holder shall be liable to account only for those Rents actually received. Note Holder shall not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Property

MULTISTATE INVESTOR RIDER TO SECURITY INSTRUMENT - Single-Family - Fannie Mae HOMESTYLE MODEL DOCUMENT Form 3738 11/01 (page 3 of 4 pages)

by reason of any act or omission of Note Holder, and Borrower hereby releases and discharges Note Holder from any such liability to the fullest extent permitted by law.

If the Rents are not sufficient to meet the costs of taking control of and managing the Property and collecting the Rents, any funds expended by Note Holder for such purposes shall become indebtedness of Borrower to Note Holder secured by the Security Instrument, as specified in the Security Instrument.

Any entering upon and taking control of the Property by Note Holder or the receiver, as the case may be, and any application of Rents as provided in this Rider shall not cure or waive any Event of Default or invalidate any other right or remedy of Note Holder under applicable law or provided for in the Security Instrument. This assignment of Rents shall terminate at such time as all sums secured by the Security Instrument are paid in full.

B. CROSS-DEFAULT. Borrower's default or breach under any note or agreement including but not limited to the Construction Loan Agreement relating to the Property, in which Note Holder has an interest, shall be a breach under the Security Instrument and Note Holder may invoke any of the remedies permitted by the Security Instrument.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and provisions contained in this Investor Rider to Security Instrument.

(Seal) -Borrower

MULTISTATE INVESTOR RIDER TO SECURITY INSTRUMENT - Single-Family - Fannie Mae HOMESTYLE MODEL DOCUMENT Form 3738 11/01 (page 4 of 4 pages)