home equity system texas information closed-end - CUNA Mutual ...

HOME EQUITY SYSTEMTEXAS INFORMATIONCLOSED-ENDContentsTexas Closed-End Loan Officer Checklist . . . . . . . . . . . . . . . . . . . . 2Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Completion Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Texas Notice to Borrower (English) . . . . . . . . . . . . . . . . . . . . . . 14Texas Notice to Borrower (Spanish) . . . . . . . . . . . . . . . . . . . . . . 16Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Texas Closed-End Adjustable Rate Mortgage Disclosure. . . . . . . . 20Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Document Explanation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Consumer Handbook on Adjustable Rate Mortgages . . . . . . . . . . 24Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Acknowledgment of Fair Market Value. . . . . . . . . . . . . . . . . . . . 26Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Completion Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Texas Closed-End Home Equity Fixed/Variable Note . . . . . . . . . . 30Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Completion Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Texas Closed-End Deed of Trust . . . . . . . . . . . . . . . . . . . . . . . . . 40Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Completion Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Texas Receipt of All Documents . . . . . . . . . . . . . . . . . . . . . . . . . 54Document Description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Completion Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Texas Closed-End Information – 1

Texas Closed-End Loan Officer ChecklistTexas Loan Officer ChecklistCLOSED-ENDLOAN NUMBERSHARE/SHARE DRAFT ACCOUNT NUMBERAPPLICANT’S NAMEPHONE NUMBERCO-APPLICANT’S NAMEPHONE NUMBERAPPLICANT’S ADDRESSCO-APPLICANT’S ADDRESS1 PRELIMINARY STEPSCHECKWHEN STEPCOMPLETEDAt the Time Application is Given to Borrower:Application Given to BorrowerTexas Notice Given to BorrowerVariable Rate Loans Only:ARM Disclosure Given to BorrowerCHARM Booklet Given to BorrowerDATE(OPTIONAL)___/___/______/___/______/___/______/___/___4 APPROVAL OR DENIAL OF LOANCHECKWHEN STEPCOMPLETEDORCredit Denied and ECOA Notice GivenAmount, Interest Rate and Term Approvedfor This Loan:DATE(OPTIONAL)___/___/______/___/___$ ______________ ______________% ________________AMOUNT INTEREST RATE TERM APPROVED2 CREDITWORTHINESS3 EQUITYAt the Time Application is Received from Borrower:Date Application is ReceivedApplication Fee CollectedMortgage Servicing Disclosure Given to Borrower(First Lien Position Only)Good Faith Estimate Given to BorrowerRequired Service Provider Notice Given to BorrowerAfter Application is Received:Debt/Income RatioLoan to Value RatioPrior Home Equity LoansCredit Denied and ECOA Notice Given to Borroweror Proceed With Steps BelowVerification of DepositVerification of EmploymentVerification of First MortgageResidential Mortgage Credit ReportVerification of DebtAppraisalTitle Insurance or Opinion of TitleFlood Hazard DeterminationFlood Notice (if applicable)___/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/___DATE(OPTIONAL)___/___/______/___/______/___/______/___/______/___/___DATE(OPTIONAL)___/___/______/___/______/___/______/___/___5 PREPARE DOCUMENTS — CLOSE LOANNOTE: The loan cannot close until the 12th day after the Texas Notice isgiven to Borrower or Borrower submits an application, whichever is later.DATE(OPTIONAL)ORA final itemized disclosure of all fees, points, interest,costs and charges to be paid at closing given toowner (must be at least 1 business day before closing)Acknowledgment of Fair Market ValueRESPA Escrow Account DisclosureNote/Truth in Lending DisclosureDeed of TrustHUD-1A Settlement StatementNotice of Right to CancelInsurance: Hazard Credit Disability Credit Life FloodAutomatic Payment AuthorizationReceipt of All Documents Signed at ClosingAdditional Credit Union Forms:3-Day Right of Rescission Time ExpiredRight of Rescission ExercisedFunds DisbursedPayment of FeesDeed of Trust RecordedLetter Sent to Prior Mortgage Holder___/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/______/___/___6 LOAN PAID IN FULLORNote Cancelled and Returned to BorrowerRelease of Lien Given to BorrowerA Copy of the Endorsement and Assignment of theLien Given to BorrowerDATE(OPTIONAL)___/___/______/___/______/___/___©CUNA MUTUAL GROUP, 1991, 97, 2003, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012ETX8012 – LOANLINER Home Equity System

Texas Closed-End Loan Officer ChecklistTexas Closed-End Loan Officer ChecklistDocument DescriptionWhen Used:Purpose:How Distributed:This document should be used each time a creditunion processes a closed-end home equity loan.This document provides a checklist your loanofficer(s) may use in processing each closed-endhome equity loan in Texas. It provides a listing of theitems that should be considered and the documentsthat must be given or received when processing aTexas home equity loan. It starts at the time anapplication is given to the borrower and ends whenthe loan is paid in full.This document should be placed in borrower’s fileafter completion.No. of Parts: 1Imprinting:Special Notes:Optional - Credit union name, address, telephonenumber and logoThis document can be used by your loan officer(s) toachieve consistency and accuracy in processing yourclosed-end home equity loans. Your credit union’sloan policies should be written to cover each itemoutlined in this document.Texas Closed-End Information – 3

Texas Closed-End Loan Officer ChecklistCompletion InstructionsThe following information will be helpful to the loan officer whenprocessing applications for closed-end home equity loans in Texas. The LoanOfficer Checklist takes you through each step when processing a homeequity closed-end loan. This information has been divided into six subheadingsbelow.1. Preliminary Steps – This section can be used to verify that theapplication has been given to the borrower and that the proper variablerate disclosures have been given (if applicable). This section can also beused to screen out applications clearly ineligible for a LOANLINER ®Home Equity Loan in Texas.At The Time Application is Given to BorrowerApplication given to borrower – The credit union can document when theapplication was given to the borrower. This can be important in doingvariable rate lending because certain disclosures must be given at thetime the application is given to the borrower.Texas Notice to Borrower – This Notice is required to be given to theborrower at least 12 days prior to closing the loan. Therefore, it ispreferable to give this Notice to the borrower as soon as possible. Forfurther details refer to the Texas Notice to Borrower section.Adjustable Rate Mortgage Disclosure (ARM Disclosure) Given to Borrower –If the credit union is offering variable rate loans, this disclosure must begiven to the borrower at the this time. For further details refer to theARM Disclosure section.Consumer Handbook on Adjustable Rate Mortgages (CHARM Booklet) Givento Borrower – If the credit union is offering variable rate loans, thisbooklet must be given to the borrower at this time. For further detailsrefer to the CHARM Booklet section.At the Time Application is Received from BorrowerDate Application is received – Regulation B Section 202.9 requires thecredit union notify the applicant of the credit decision within 30 daysafter a completed application is received.If the application is incomplete, the credit union has two options. TheOfficial Staff Commentary for Regulation B Section 202.9(a)(1)3 states:“When an application is incomplete regarding matters the applicantcan complete and the creditor lacks sufficient data for a credit decision,the creditor may deny the application giving as the reason for denialthat the application is incomplete. The creditor has the option,alternatively, of providing a notice of incompleteness under Section202.9(c).”4 – LOANLINER Home Equity System

Texas Closed-End Loan Officer ChecklistAdverse Action Notice documents are available for purchase throughLOANLINER ® Lending Systems.Application Fee (if collected) – At the time the borrower submits anapplication, your credit union may collect an “application fee” whichcovers the cost of the appraisal, credit report, etc.Mortgage Servicing Disclosure – This disclosure is required by RESPAand applies to loans in 1st lien position only. It states that the right tocollect the mortgage payments may be transferred. LOANLINER doesnot supply this document.At the Time Application is Received or within 3 business days:Good Faith Estimate – This disclosure is required by RESPA and givesestimates of the amounts the borrower will pay at or before closing.Required Service Provider Notice – If the credit union requires theborrower to use specified settlement service providers then theproviders must be disclosed. The LOANLINER Good Faith Estimatemay be used to make this disclosure. You will want to attach a separatesheet to the Good Faith Estimate listing your required providers.After the Application is ReceivedDebt/Income Ratio – Your credit union must figure the borrower’s debtto income ratio. NCUA Letter No. 124 recommends that your creditunion establish a debt/income ratio. If the information on theapplication makes it clear the borrower cannot qualify for a homeequity closed-end loan, you may choose not to go to the expense ofverifying employment, checking credit history, determining equity andexamining title.Loan to Value Ratio – In accordance with the Texas Constitution, whenyou add the principal balances of all other indebtedness against theproperty, the ratio of the total amount of credit extended to the totalequity in the home should not exceed 80% of the fair market value ofthe home on the date the extension of credit is made.Prior Home Equity Loans – Only one home equity loan can be secured bythe borrower’s homestead at a time. Therefore, the borrower must payoff any existing home equity loan before he/she may obtain another.Credit Denied and ECOA Notice Given – Based on the above stepsevaluate whether credit will be granted or denied. If credit will bedenied send a copy of an Adverse Action document completedappropriately to meet Regulation B Section 202.9 and if you used acredit report, the Fair Credit Reporting Act (FCRA). If credit is notdenied, proceed with the following steps.Texas Closed-End Information – 5

Texas Closed-End Loan Officer Checklist2. Creditworthiness – In order to verify the information on the applicationthe following information is usually needed in order to evaluate theapplicant’(s) creditworthiness.Verification of Deposit – “Request for Verification of Deposit” should beobtained from each depository institution (other than the credit union)the applicant(s) or other persons (co-applicant, spouse or formerspouse) indicated on the application. Your credit union should have theapplicant(s) or other person sign each verification of deposit beforesending to the depository institution.The “Request for Verification of Deposit” is available for purchasethrough LOANLINER ® Lending Systems.Verification of Employment – “Request for Verification of Employment”should be obtained from each former and current employer indicatedby the applicant(s) or other person for the period of time you chose.The credit union should have the applicant(s) or other person sign each“verification” before sending to the former or current employers.The “Request for Verification of Employment” is available for purchasethrough LOANLINER ® Lending Systems.Verification of First Mortgagor – Your credit union should obtain a“Request for Verification of Mortgage” to verify existing mortgages.This obtains direct verification of mortgage payments from theinstitution indicated on the application. Many special situations mayarise. These must be evaluated by a person with experience inmortgage lending law.The “Request for Verification of Mortgage” is available for purchasethrough LOANLINER ® Lending Systems.Residential Mortgage Credit Report – A detailed “Residential MortgageCredit Report” should be obtained on each applicant(s) or other personfrom a Credit Reporting Agency (Bureau). This report should give adetailed account of the credit, employment, and residence history, aswell as public record information, concerning each applicant(s) or otherperson.Verification of Debt – Your credit union should obtain a “Request forDirect Credit Verification” to verify any debts which will not appear onthe credit report. If there is any doubt that a debt will not be reflectedon the credit report a direct credit verification should be sent.The “Direct Credit Verification” is available for purchase throughLOANLINER ® Lending Systems.6 – LOANLINER Home Equity System

Texas Closed-End Loan Officer Checklist3. Equity – This section discusses the steps your credit union should taketo determine the fair market value of the home and measure the equity.Appraisal – Obtain an appraisal to verify the value of the property andto determine the equity available in the property that is used assecurity. This appraisal should meet the appraisal guidelines outlinedin the NCUA Letter No. 124 and NCUA Regulation Part 722. Refer toLetter No. 124 to determine whether a written appraisal is needed andwhether a licensed or certified appraiser is required.Note: An Acknowledgment of Fair Market Value will be signed by theborrower and the credit union at closing.Title Insurance or Opinion of Title – Obtain a title examination (titleinsurance or opinion of title) to verify your lien priority. The guidelinesoutlined in the NCUA Letter No. 124 recommend that all Lendersobtain Title Insurance and/or an Opinion of Title.Note: It is extremely important that the credit union verify all otherliens on the property due to the fact that a home equity loan may onlybe granted if the borrower has a loan to value ratio of the principalbalance of all loans secured by the homestead, not in excess of 80%, onthe date of closing.Flood Hazard Determination – For every loan made by a credit union(federally chartered or state chartered, federally insured) which issecured by a building or mobile home, the credit union must use astandard Flood Hazard Determination to determine whether thesecured property is or will be located in a special flood hazard area(SFHA). Either the credit union or a vendor may complete thedocument.Flood Insurance Notice – If it is determined that the building or mobilehome securing the loan is located in a special flood hazard area, thenthis notice must be provided to the borrower/owner.4. Approval or Denial of Loan – Based on all the information receivedfrom the above steps evaluate whether credit will be denied orapproved.If credit will be denied, send a copy of an adverse action noticecompleted appropriately to meet Regulation B Section 202.9 and theFCRA. If credit is approved, send letter to applicant notifying them ofapproval and then proceed with the following steps:5. Prepare Documents – Close Loan – Once a determination has beenmade to extend a home equity loan, various documents should beprepared for closing. In most instances, the borrower will actually signthe documents at closing. In accordance with the Texas Constitution, aTexas Closed-End Information – 7

Texas Closed-End Loan Officer Checklisthome equity loan may not close until the 12th day after the later of thedate that the owner of the homestead submits an application to thelender for the extension of credit or the date that the lender providesthe owner a copy of the notice required by the constitutionalamendment. Furthermore, a home equity loan cannot be closed untilthe first anniversary of the closing date of any other home equity loansecured by this property. Additionally, the loan may only be closed atthe credit union, an attorney’s office, or a title company.A final itemized disclosure of all fees, points, interest, costs and charges to bepaid at closing given to owner – The Texas Constitution provides that theloan cannot close before one business day after the date that the ownerof the homestead receives a final itemized disclosure of the actual fees,points, interest, costs and charges that will be charged at closing. If abonafide emergency or another good cause exists and the credit unionobtains the written consent of the owner, the credit union may providethe documentation to the owner or the credit union may modifypreviously provided documentation on the date of closing.Acknowledgment of Fair Market Value – The Texas Constitution requiresthe borrower and the credit union to sign an Acknowledgment of FairMarket Value at the time the loan is closed.RESPA Escrow Account Disclosure – This document discloses any escrowrequirements and specifies the amounts.Note and Disclosure Statement – The Note and Truth in LendingDisclosure consists of three main sections: the Truth in Lendingdisclosures, the promissory note and the credit insurance applicationsection. The “Fed Box” includes the disclosures required to be givenunder Regulation Z. The promissory note contains the contractuallanguage necessary to obligate the borrower(s) to repay the loan.Your credit union will be responsible for completing the Note andTruth in Lending Disclosure for closing.Deed of Trust – The Deed of Trust signifies the borrower(s)’ pledge ofreal property as collateral in order to secure the closed-end loan.Preparation of the Deed of Trust for closing requires your credit unionto complete applicable information. Your credit union will also need toprepare the signature and acknowledgment area for the borrower’ssignature at closing.At closing, the credit union will need to obtain the signature(s) on theDeed of Trust of those persons who have an ownership interest in theproperty being offered as security as well as the spouse of each owner.Once the Deed of Trust has been executed, and the Right of Rescission8 – LOANLINER Home Equity System

Texas Closed-End Loan Officer Checklisttime has expired, the credit union should take all necessary steps torecord the instrument and perfect their interest in the property.HUD 1A Settlement Statement – This disclosure states all of the actualfees and costs paid by the borrower at or prior to closing.Notice of Right to Cancel – It is important to alert borrowers they will notreceive any funds immediately at closing. By informing the borrowerabout the right to cancel, your credit union can avoid inconveniencewhich might arise if the borrower is under the impression they canreceive funds the day the documents are signed. Your credit unionshould not disburse any funds until the three-day right to cancelperiod has passed. The rescission period will expire at midnight on thethird business day following the consummation of the loan, delivery ofthe Notice of Right to Cancel or delivery of all material disclosures (theNote and Disclosure Statement) whichever occurs last. In preparing theNotice of Right to Cancel, your credit union should prepare notices foreach person having a right to rescind. A person has a right to rescind ifthey give a security interest in their principal dwelling.Once the rescission period has passed and the Statement ofNoncancellation is received, the credit union may disburse funds. Ifyour credit union does not receive a signed Statement ofNoncancellation, you may only disburse funds when you are satisfiedthe rescission period has passed and no eligible person has exercisedtheir right to cancel the transaction.Insurance: Hazard, Disability, Life and Flood – At closing, your creditunion must receive evidence that adequate hazard insurance is in placeand the credit union is named as a beneficiary party.Your credit union should determine whether or not the property beingoffered is located in a special flood hazard area to meet the FloodDisaster Protection Act of NCUA Regulations 12 C.F.R. Section 760. If itis determined that the property is located in such an area, the creditunion must receive documentation that adequate flood insurance hasbeen purchased.Your credit union should determine if the borrower wants CreditDisability and/or Credit Life insurance.Automatic Payment Authorization – Some credit unions will useautomatic payment features such as payroll deduction. If your creditunion offers automatic payments, you should have the borrowers signthe appropriate documents used by your credit union for this purpose.Receipt of Documents Signed at Closing – The Texas Constitution requiresthat the borrower receive a copy of all documents signed at closing.This document verifies that the borrower received them.Texas Closed-End Information – 9

Texas Closed-End Loan Officer ChecklistAdditional Credit Union DocumentsYour credit union may require additional documents in order tocomplete the home equity loan. Any additional documents should beprepared for borrower’s signature at closing.3-Day Right of Rescission Time Expired – No funds can be disbursed untilthe rescission period has expired and the credit union is reasonablysatisfied the homeowners have not rescinded.After you’re certain the borrower does not wish to cancel thetransaction, it’s recommended you have the borrowers return and signthe original Notice of Right to Cancel confirming their non-cancellation.When this step occurs, you’re ready to disburse the funds, pay all feesto appropriate parties, record the Deed of Trust, and notify the firstmortgage holder.Right of Rescission Exercised – If the borrower(s) exercises their right tocancel, then you must take certain steps. First, you must receive writtennotification of the desire to cancel the transaction. The borrower canuse a copy of the “Notice of Right to Cancel” you gave to them atclosing or any written statement signed and dated by the borrowerstating their intent to cancel. The date by which they must exercisetheir right to cancel is stated on the original Notice of Right to Cancel.When this occurs, you must refund any and all fees or charges theborrower paid to obtain approval for the loan. You must return theborrower's money within 20 days of receiving the notification ofcancellation. Additionally, if a lien has been filed, it must be released.Funds Disbursed – You can disburse the funds in many ways. You coulddo so in the form of a check at the credit union, check by mail, or placethe funds directly into the borrower’s account.Payment of Fees – Now is the time to pay all the fees collected with thistransaction to the appropriate parties.Deed of Trust Recorded – If you did not already do so, record the Deed ofTrust with the government agency responsible for real estate records.Letter Sent to Prior Mortgage Holder – A letter can be sent notifying theholder of any prior mortgage that the borrower has applied for a homeequity loan and the credit union is requesting information about theprior mortgage. Following approval of the home equity loan, the creditunion can send a letter to the prior mortgage holder that the creditunion’s security instrument has been recorded. A sample of theseletters are on the following pages.10 – LOANLINER Home Equity System

Texas Closed-End Loan Officer ChecklistSample of Letter to Send BeforeConsummation of the Closed-End Loan______________________(Date)Name & Address ofHolder of 1st(Mortgage or Deed of Trust)RE: Borrowers’ NamesStreet Address of PropertyCity, State and ZipCredit Union Acct. No.Dear _______________:The borrowers listed above have applied to us for a home equity loan. Theborrowers’ signatures below authorize you to release to us the followinginformation about your (Mortgage or Deed of Trust).______________ Original Balance______________ Fixed Rate______________ Current Balance______________ Variable Rate______________ Current Monthly Payment ______________ Renegotiable Rate______________ Principal and Interest ______________ FHA______________ Taxes and Insurance ______________ VA______________ Maturity Date______________ ConventionalMo/Day/Yr______________ Payment status is satisfactory (payments are made promptlyand in full).______________ Payment status is not satisfactory (please explain)____________________________________________________________________________________________________________________ Yes ____ No Your (Mortgage or Deed of Trust) permits the borrowers toplace a junior (Mortgage or Deed of Trust) on the property.Please send this document in the enclosed stamped, addressed envelope to:(name of credit union; street address; city, state, zip). Thank you for yourcooperation.Information provided by:________________________________________________________________Signature - Credit UnionTitle:____________________________Phone:__________________________Please release the information requested above to (name of your credit union).___________________________Borrower___________________________Borrower____________Date____________DateTexas Closed-End Information – 11

Texas Closed-End Loan Officer ChecklistSample of Letter to Send AfterConsummation of the Closed-End Loan______________________(Date)Name & Address ofHolder of 1st(Mortgage or Deed of Trust)RE: Borrowers’ NamesStreet Address of PropertyCity, State and ZipCredit Union Acct. No.Dear _______________:(Name of credit union) has executed a home equity loan for the borrowers listedabove. The borrowers agreed not to request or accept any future advances onthe (Mortgage or Deed of Trust) you hold. The borrowers request and authorizeyou to notify us if their account with you ever becomes delinquent.The (Mortgage or Deed of Trust) securing the loan was recorded on__________ (date) at the _____________________________________ (name ofrecording office) on ______________ page of ________________ book. Theprincipal balance of the home equity loan is $_______________.Thank you for your cooperation._______________________________Signature - Credit UnionWe have agreed not to increase the balance of the first (Mortgage or Deed ofTrust) with you. We authorize you to notify (name of credit union) if ouraccount becomes delinquent.___________________________Borrower___________________________Borrower____________Date____________Date12 – LOANLINER Home Equity System

Texas Closed-End Loan Officer Checklist6. Loan Paid in FullNote Cancelled and Returned to Borrower – In accordance with the TexasConstitution, after the loan is paid in full, within a reasonable time, thecredit union must cancel and return the Note to the borrower.Release of Lien Given to Borrower – When the loan is paid in full, thecredit union must also provide the borrower with a release of the liensecuring the debt, in recordable form, orA Copy of the Endorsement and Assignment of the Lien Sent to the Borrower– When the loan is paid in full, the credit union must provide theborrower with a copy of an endorsement and assignment of the lien toa lender that is refinancing the extension of credit.Texas Closed-End Information – 13

Texas Notice to Borrower (English)“NOTICE CONCERNING EXTENSIONS OF CREDITDEFINED BY SECTION 50(a)(6), ARTICLE XVI, TEXAS CONSTITUTION:“SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS CONSTITUTION ALLOWS CERTAIN LOANS TOBE SECURED AGAINST THE EQUITY IN YOUR HOME. SUCH LOANS ARE COMMONLY KNOWN ASEQUITY LOANS. IF YOU DO NOT REPAY THE LOAN OR IF YOU FAIL TO MEET THE TERMS OF THE LOAN,THE LENDER MAY FORECLOSE AND SELL YOUR HOME. THE CONSTITUTION PROVIDES THAT:“(A) THE LOAN MUST BE VOLUNTARILY CREATED WITH THE CONSENT OF EACH OWNER OFYOUR HOME AND EACH OWNER’S SPOUSE;“(B) THE PRINCIPAL LOAN AMOUNT AT THE TIME THE LOAN IS MADE MUST NOT EXCEED ANAMOUNT THAT, WHEN ADDED TO THE PRINCIPAL BALANCES OF ALL OTHER LIENS AGAINST YOURHOME, IS MORE THAN 80 PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME;“(C) THE LOAN MUST BE WITHOUT RECOURSE FOR PERSONAL LIABILITY AGAINST YOU ANDYOUR SPOUSE UNLESS YOU OR YOUR SPOUSE OBTAINED THIS EXTENSION OF CREDIT BY ACTUALFRAUD;“(D) THE LIEN SECURING THE LOAN MAY BE FORECLOSED UPON ONLY WITH A COURT ORDER;“(E) FEES AND CHARGES TO MAKE THE LOAN MAY NOT EXCEED 3 PERCENT OF THE LOANAMOUNT;“(F) THE LOAN MAY NOT BE AN OPEN-END ACCOUNT THAT MAY BE DEBITED FROM TIME TOTIME OR UNDER WHICH CREDIT MAY BE EXTENDED FROM TIME TO TIME UNLESS IT IS A HOMEEQUITY LINE OF CREDIT;“(G) YOU MAY PREPAY THE LOAN WITHOUT PENALTY OR CHARGE;“(H) NO ADDITIONAL COLLATERAL MAY BE SECURITY FOR THE LOAN;“(I) THE LOAN MAY NOT BE SECURED BY AGRICULTURAL HOMESTEAD PROPERTY, UNLESSTHE AGRICULTURAL HOMESTEAD PROPERTY IS USED PRIMARILY FOR THE PRODUCTION OF MILK;“(J) YOU ARE NOT REQUIRED TO REPAY THE LOAN EARLIER THAN AGREED SOLELY BECAUSETHE FAIR MARKET VALUE OF YOUR HOME DECREASES OR BECAUSE YOU DEFAULT ON ANOTHERLOAN THAT IS NOT SECURED BY YOUR HOME;“(K) ONLY ONE LOAN DESCRIBED BY SECTION 50(a)(6), ARTICLE XVI, OF THE TEXASCONSTITUTION MAY BE SECURED WITH YOUR HOME AT ANY GIVEN TIME;“(L) THE LOAN MUST BE SCHEDULED TO BE REPAID IN PAYMENTS THAT EQUAL OR EXCEEDTHE AMOUNT OF ACCRUED INTEREST FOR EACH PAYMENT PERIOD;“(M) THE LOAN MAY NOT CLOSE BEFORE 12 DAYS AFTER YOU SUBMIT A WRITTENAPPLICATION TO THE LENDER OR BEFORE 12 DAYS AFTER YOU RECEIVE THIS NOTICE, WHICHEVERDATE IS LATER; AND IF YOUR HOME WAS SECURITY FOR THE SAME TYPE OF LOAN WITHIN THE PASTYEAR, A NEW LOAN SECURED BY THE SAME PROPERTY MAY NOT CLOSE BEFORE ONE YEAR HASPASSED FROM THE CLOSING DATE OF THE OTHER LOAN;“(N) THE LOAN MAY CLOSE ONLY AT THE OFFICE OF THE LENDER, TITLE COMPANY, OR ANATTORNEY AT LAW;“(O) THE LENDER MAY CHARGE ANY FIXED OR VARIABLE RATE OF INTEREST AUTHORIZED BYSTATUTE;©CUNA MUTUAL GROUP, 1997, 2000, 03, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012 CONTINUED ON REVERSE SIDE ETX20214 – LOANLINER Home Equity System

Texas Notice to Borrower (English)“(P) ONLY A LAWFULLY AUTHORIZED LENDER MAY MAKE LOANS DESCRIBED BY SECTION50(a)(6), ARTICLE XVI, OF THE TEXAS CONSTITUTION;MUST:“(Q) LOANS DESCRIBED BY SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS CONSTITUTION“(1) NOT REQUIRE YOU TO APPLY THE PROCEEDS TO ANOTHER DEBT EXCEPT A DEBTTHAT IS SECURED BY YOUR HOME OR OWED TO ANOTHER LENDER;“(2) NOT REQUIRE THAT YOU ASSIGN WAGES AS SECURITY;BE FILLED IN;“(3) NOT REQUIRE THAT YOU EXECUTE INSTRUMENTS WHICH HAVE BLANKS LEFT TO“(4) NOT REQUIRE THAT YOU SIGN A CONFESSION OF JUDGMENT OR POWER OFATTORNEY TO ANOTHER PERSON TO CONFESS JUDGMENT OR APPEAR IN A LEGAL PROCEEDING ONYOUR BEHALF;“(5) PROVIDE THAT YOU RECEIVE A COPY OF ALL DOCUMENTS YOU SIGN AT CLOSING;“(6) PROVIDE THAT THE SECURITY INSTRUMENTS CONTAIN A DISCLOSURE THAT THISLOAN IS A LOAN DEFINED BY SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS CONSTITUTION;“(7) PROVIDE THAT WHEN THE LOAN IS PAID IN FULL, THE LENDER WILL SIGN ANDGIVE YOU A RELEASE OF LIEN OR AN ASSIGNMENT OF THE LIEN, WHICHEVER IS APPROPRIATE;“(8) PROVIDE THAT YOU MAY, WITHIN 3 DAYS AFTER CLOSING, RESCIND THE LOANWITHOUT PENALTY OR CHARGE;“(9) PROVIDE THAT YOU AND THE LENDER ACKNOWLEDGE THE FAIR MARKET VALUEOF YOUR HOME ON THE DATE THE LOAN CLOSES; AND“(10) PROVIDE THAT THE LENDER WILL FORFEIT ALL PRINCIPAL AND INTEREST IF THELENDER FAILS TO COMPLY WITH THE LENDER’S OBLIGATIONS UNLESS THE LENDER CURES THEFAILURE TO COMPLY AS PROVIDED BY SECTION 50(a)(6)(Q)(x), ARTICLE XVI, OF THE TEXASCONSTITUTION; AND“(R) IF THE LOAN IS A HOME EQUITY LINE OF CREDIT:“(1) YOU MAY REQUEST ADVANCES, REPAY MONEY, AND REBORROW MONEY UNDERTHE LINE OF CREDIT;LEAST $4,000;“(2) EACH ADVANCE UNDER THE LINE OF CREDIT MUST BE IN AN AMOUNT OF AT“(3) YOU MAY NOT USE A CREDIT CARD, DEBIT CARD, SOLICITATION CHECK, ORSIMILAR DEVICE TO OBTAIN ADVANCES UNDER THE LINE OF CREDIT;“(4) ANY FEES THE LENDER CHARGES MAY BE CHARGED AND COLLECTED ONLY ATTHE TIME THE LINE OF CREDIT IS ESTABLISHED AND THE LENDER MAY NOT CHARGE A FEE INCONNECTION WITH ANY ADVANCE;“(5) THE MAXIMUM PRINCIPAL AMOUNT THAT MAY BE EXTENDED, WHEN ADDED TOALL OTHER DEBTS SECURED BY YOUR HOME, MAY NOT EXCEED 80 PERCENT OF THE FAIR MARKETVALUE OF YOUR HOME ON THE DATE THE LINE OF CREDIT IS ESTABLISHED;“(6) IF THE PRINCIPAL BALANCE UNDER THE LINE OF CREDIT AT ANY TIME EXCEEDS50 PERCENT OF THE FAIR MARKET VALUE OF YOUR HOME, AS DETERMINED ON THE DATE THE LINEOF CREDIT IS ESTABLISHED, YOU MAY NOT CONTINUE TO REQUEST ADVANCES UNDER THE LINE OFCREDIT UNTIL THE BALANCE IS LESS THAN 50 PERCENT OF THE FAIR MARKET VALUE; AND“(7) THE LENDER MAY NOT UNILATERALLY AMEND THE TERMS OF THE LINE OF CREDIT.“THIS NOTICE IS ONLY A SUMMARY OF YOUR RIGHTS UNDER THE TEXAS CONSTITUTION.YOUR RIGHTS ARE GOVERNED BY SECTION 50, ARTICLE XVI, OF THE TEXAS CONSTITUTION, ANDNOT BY THIS NOTICE.”Texas Closed-End Information – 15

Texas Notice to Borrower (Spanish)NOTIFICACIÓN SOBRE EL OTORGAMIENTO DE CRÉDITOSDEFINIDOS EN EL ARTÍCULO 50(a)(6), SECCIÓN XVI DE LACONSTITUCIÓN DE TEXAS:“EL ARTÍCULO 50(a)(6), SECCIÓN XVI DE LA CONSTITUCIÓN DE TEXAS PERMITE QUE CIERTOSPRÉSTAMOS ESTÉN GARANTIZADOS POR SU VIVIENDA. ESTOS PRÉSTAMOS NORMALMENTE SECONOCEN COMO SEGUNDA HIPOTECA. SI USTED NO CANCELA EL PRÉSTAMO O SI NO CUMPLE CONLAS CONDICIONES DE ÉSTE, EL PRESTAMISTA PUEDE EJECUTAR Y VENDER SU VIVIENDA. LACONSTITUCIÓN ESTIPULA QUE:(A) EL PRÉSTAMO DEBE CREARSE VOLUNTARIAMENTE, CON EL CONSENTIMIENTO DE TODOSLOS PROPIETARIOS DE LA VIVIENDA Y SUS CÓNYUGES.(B) EL CAPITAL DEL PRÉSTAMO EN EL MOMENTO EN QUE SE OTORGA NO DEBE SUPERAR UNMONTO QUE, SUMADO A LOS SALDOS DEL CAPITAL DE TODOS LOS OTROS DERECHOS DE GARANTÍASOBRE SU VIVIENDA, EXCEDA EL 80 POR CIENTO DEL VALOR RAZONABLE DE LA VIVIENDA EN ELMERCADO.(C) EL PRÉSTAMO NO PUEDE TENER GARANTÍA DE RESPONSABILIDAD PATRIMONIAL CONTRAUSTED NI CONTRA SU CÓNYUGE A MENOS QUE USTED O SU CÓNYUGE OBTUVIERAN EL CRÉDITOPOR FRAUDE.(D) LA GARANTÍA REAL DEL PRÉSTAMO SÓLO PUEDE EJECUTARSE MEDIANTE UNA ORDEN DEUN TRIBUNAL.(E) LOS CARGOS Y GASTOS DE OTORGAMIENTO DEL PRÉSTAMO NO PUEDEN SUPERAR EL 3POR CIENTO DEL MONTO DE ÉSTE.(F) EL PRÉSTAMO NO PUEDE SER UNA CUENTA ABIERTA QUE PUEDA DEBITARSEPERIÓDICAMENTE O POR LA CUAL PUEDAN OTORGARSE CRÉDITOS PERIÓDICAMENTE A MENOSQUE SEA UNA LÍNEA DE CRÉDITO CON SEGUNDA HIPOTECA.(G) USTED PUEDE CANCELAR ANTICIPADAMENTE EL PRÉSTAMO SIN CARGOS NI MULTAS.(H) EL PRÉSTAMO NO PUEDE TENER GARANTÍAS ADICIONALES.(I) NO SE PUEDE GARANTIZAR EL PRÉSTAMO CON PROPIEDADES O HACIENDAS AGRÍCOLAS,A MENOS QUE LA PROPIEDAD SE USE PRINCIPALMENTE PARA LA PRODUCCIÓN DE LECHE.(J) NO SE LE EXIGIRÁ QUE CANCELE EL PRÉSTAMO ANTES DE LO ACORDADOEXCLUSIVAMENTE POR CAUSA DE LA DISMINUCIÓN DEL VALOR RAZONABLE DE LA VIVIENDA EN ELMERCADO NI DEBIDO A SU INCUMPLIMIENTO DEL PAGO DE OTRO PRÉSTAMO QUE NO ESTÁGARANTIZADO CON SU VIVIENDA.(K) PODRÁ GARANTIZAR CON SU VIVIENDA UN SOLO PRÉSTAMO DEFINIDO EN EL ARTÍCULO50(a)(6), SECCIÓN XVI DE LA CONSTITUCIÓN DE TEXAS, EN CUALQUIER MOMENTO.(L) LA CANCELACIÓN DEL PRÉSTAMO DEBE ESTAR PROGRAMADA EN PAGOS EQUIVALENTESO QUE SUPEREN EL MONTO DE INTERESES ACUMULADOS PARA CADA PERÍODO DE PAGO.(M) EL PRÉSTAMO NO SE PUEDE CERRAR ANTES DE QUE HAYAN TRANSCURRIDO 12 DÍASDESPUÉS DE QUE USTED PRESENTE AL PRESTAMISTA UNA SOLICITUD POR ESCRITO O ANTES DEQUE HAYAN TRANSCURRIDO 12 DÍAS DESPUÉS QUE USTED RECIBIERA ESTA NOTIFICACIÓN, LO QUESEA POSTERIOR. SI SU VIVIENDA GARANTIZABA EL MISMO TIPO DE PRÉSTAMO EL AÑO ANTERIOR,NO SE PUEDE CERRAR UN NUEVO PRÉSTAMO GARANTIZADO POR LA MISMA PROPIEDAD ANTES DEQUE HAYA TRANSCURRIDO UN AÑO DESDE LA FECHA DE CIERRE DEL OTRO PRÉSTAMO.(N) EL PRÉSTAMO SE PUEDE CERRAR SÓLO EN LA OFICINA DEL PRESTAMISTA, LA DE LACOMPAÑÍA SOLICITANTE O LA OFICINA DE UN ABOGADO.(O) EL PRESTAMISTA PUEDE COBRAR CUALQUIER TASA DE INTERÉS FIJO O VARIABLEAUTORIZADA POR LA LEY.(P) SÓLO UN PRESTAMISTA LEGALMENTE AUTORIZADO PUEDE HACER PRÉSTAMOS COMOLOS QUE SE DEFINEN EN EL ARTÍCULO 50(a)(6), SECCIÓN XVI, DE LA CONSTITUCIÓN DE TEXAS.©CUNA MUTUAL GROUP, 1997, 2000, 03, TODOS LOS DERECHOS RESERVADOSPARA ORDENAR: 1-800-356-5012 CONTINÚA AL DORSO ETX22116 – LOANLINER Home Equity System

Texas Notice to Borrower (Spanish)(Q) LOS PRÉSTAMOS QUE SE DEFINEN EN EL ARTÍCULO 50(a)(6), SECCIÓN XVI DE LACONSTITUCIÓN DE TEXAS:(1) NO DEBEN EXIGIRLE QUE APLIQUE LOS FONDOS A OTRA DEUDA EXCEPTO QUEESA DEUDA ESTÉ GARANTIZADA POR SU VIVIENDA O QUE EL ACREEDOR SEA OTRO PRESTAMISTA;(2) NO DEBEN EXIGIRLE QUE HAGA USO DE SUELDOS A MANERA DE GARANTÍA;(3) NO DEBEN EXIGIRLE QUE LIBRE INSTRUMENTOS DE PAGO CON ESPACIOS ENBLANCO PARA COMPLETAR;(4) NO DEBEN EXIGIRLE QUE FIRME UNA ADMISIÓN DE SENTENCIA NI PODER DEREPRESENTACIÓN LEGAL PARA QUE OTRA PERSONA ADMITA UNA SENTENCIA O COMPAREZCA ENUN PROCESO LEGAL EN SU NOMBRE;(5) DEBEN ESTIPULAR QUE USTED RECIBA UNA COPIA DE TODOS LOS DOCUMENTOSQUE FIRME EN EL CIERRE;(6) DEBEN ESTIPULAR QUE LOS INSTRUMENTOS DE GARANTÍA CONTENGAN UNADECLARACIÓN DE QUE ESTE PRÉSTAMO SE DEFINE EN EL ARTÍCULO 50(a)(6), SECCIÓN XVI, DE LACONSTITUCIÓN DE TEXAS;(7) DEBEN ESTIPULAR QUE CUANDO EL PRÉSTAMO SE PAGUE COMPLETAMENTE, ELPRESTAMISTA FIRMARÁ Y LE ENTREGARÁ UNA CANCELACIÓN DE LA GARANTÍA REAL OTRANSFERENCIA DE LA GARANTÍA REAL, SEGÚN CORRESPONDA;(8) DEBEN ESTIPULAR QUE USTED PUEDE RESCINDIR EL PRÉSTAMO SIN CARGOS NIMULTAS DENTRO DE UN PLAZO DE 3 DÍAS DESPUÉS DEL CIERRE;(9) DEBEN ESTIPULAR QUE TANTO USTED COMO EL PRESTAMISTA RECONOCEN ELVALOR RAZONABLE DE LA VIVIENDA EN EL MERCADO A LA FECHA DE CIERRE DEL PRÉSTAMO; Y(10) DEBEN ESTIPULAR QUE EL PRESTAMISTA PERDERÁ EL DERECHO A TODO ELCAPITAL DEL PRÉSTAMO Y A LOS INTERESES SI NO CUMPLE CON SUS OBLIGACIONES A MENOS QUEEL PRESTAMISTA SUBSANE EL INCUMPLIMIENTO SEGÚN SE ESPECIFICA EN EL ARTÍCULO50(a)(6)(Q)(x), SECCIÓN XVI DE LA CONSTITUCIÓN DE TEXAS.(R) SI EL PRÉSTAMO ES UNA LÍNEA DE CRÉDITO CON SEGUNDA HIPOTECA:(1) USTED PUEDE SOLICITAR ADELANTOS, REINTEGRAR DINERO Y VOLVER ASOLICITAR DINERO PRESTADO A TRAVÉS DE LA LÍNEA DE CRÉDITO;(2) CADA ADELANTO A TRAVÉS DE LA LÍNEA DE CRÉDITO DEBE SER DE UN MONTOMÍNIMO DE $4,000;(3) USTED NO PUEDE USAR TARJETAS DE CRÉDITO, DE DÉBITO, CHEQUES DEPROMOCIÓN NI INSTRUMENTOS SIMILARES PARA OBTENER ADELANTOS A TRAVÉS DE LA LÍNEA DECRÉDITO;(4) TODOS LOS CARGOS DEL PRESTAMISTA SÓLO PUEDEN COBRARSE EN ELMOMENTO EN QUE SE ESTABLECE LA LÍNEA DE CRÉDITO. EL PRESTAMISTA NO PUEDE COBRARCARGOS EN RELACIÓN CON NINGÚN ADELANTO;(5) EL CAPITAL DE CRÉDITO MÁXIMO QUE SE PUEDE OTORGAR, SUMADO A TODASLAS OTRAS DEUDAS GARANTIZADAS POR SU VIVIENDA, NO PUEDE EXCEDER EL 80 POR CIENTO DELVALOR RAZONABLE DE LA VIVIENDA EN EL MERCADO EN LA FECHA EN QUE SE ESTABLECE LA LÍNEADE CRÉDITO;(6) SI EL SALDO DEL CAPITAL DE LA LÍNEA DE CRÉDITO EN CUALQUIER MOMENTOSUPERA EL 50 POR CIENTO DEL VALOR RAZONABLE DE LA VIVIENDA EN EL MERCADO, COMO SEDETERMINA EN LA FECHA EN QUE SE ESTABLECE LA LÍNEA DE CRÉDITO, USTED NO PUEDECONTINUAR SOLICITANDO ADELANTOS A TRAVÉS DE LA LÍNEA DE CRÉDITO HASTA QUE EL SALDOSEA MENOR AL 50 POR CIENTO DEL VALOR RAZONABLE DE LA VIVIENDA EN EL MERCADO; Y(7) EL PRESTAMISTA NO PUEDE MODIFICAR UNILATERALMENTE LAS CONDICIONESDE LA LÍNEA DE CRÉDITO.“ESTA NOTIFICACIÓN ES SÓLO UN RESUMEN DE SUS DERECHOS CONFORME A LA CONSTITUCIÓNDE TEXAS.SUS DERECHOS SE RIGEN POR EL ARTÍCULO 50, SECCIÓN XVI DE LA CONSTITUCIÓN DE TEXAS, NOPOR ESTA NOTIFICACIÓN.”Texas Closed-End Information – 17

Texas Notice to BorrowerTexas Notice to Borrower(Notice Concerning Extensions of Credit Defined by Section50(a)(6), Article XVI, Texas Constitution)Document DescriptionWhen Used: This Notice is required to be given to the borrower atleast 12 days prior to closing the loan. Therefore, itshould be given as early as possible, such as the time theapplication is given to the borrower or at the time theapplication is received.Purpose:In order to make a Texas home equity loan a credit unionmust provide the borrower with this Notice whichexplains the credit union’s responsibilities andprohibitions and the borrower’s rights and remedies.How Distributed: This Notice should be given to the borrower at the timethe application is given to the borrower or received fromthe borrower by the credit union.No. of Parts: 1 part (2 pages)Imprinting: Optional - Credit union name, address, telephonenumber and logoSpecial Notes: If discussions with the borrower are conducted primarilyin a language other than English, the credit union must,before closing, provide an additional copy of the Noticein the language in which the discussions wereconducted.There is nothing for the credit union to complete on thisdocument.Document ETX22 is the Spanish version of the TexasNotice to Borrower.18 – LOANLINER Home Equity System

Texas Closed-End Information – 19

Adjustable Rate Mortgage DisclosureADJUSTABLE RATE MORTGAGE DISCLOSUREThis disclosure describes the features of the adjustable rate mortgage (ARM) program you areconsidering. Information on other ARM programs is avilable upon request.HOW YOUR INTEREST RATE AND PAYMENT ARE DETERMINEDYour interest rate will be based on an index rate plus a margin. The index is the Prime Rate as publishedin the Wall Street Journal. When a range of rates has been published, the highest applicable rate has beenselected. Information about the index is available or published at least weekly in the Money Rates table ofthe Wall Street Journal.Ask for our current interest rate and margin. Your payment will be based on the interest rate, loan balance,and loan term.HOW YOUR INTEREST RATE CAN CHANGEYour interest rate can change annually on the first day of January.Your interest rate cannot increase or decrease more than 6 percentage points from the initial interest rate.HOW YOUR PAYMENT CAN CHANGEYour monthly payment can increase or decrease substantially based on annual changes in the interest rate.You will be notified in writing at least 25, but no more than 120, calendar days before a payment at a newlevel is due. This notice will contain information about your interest rates, payment amount, and loanbalance.For example, on a $10,000, 15 year loan with an initial interest rate of 9.71%, the rate in effect in July 2003,the maximum amount that the interest rate can rise under this program is 6 percentage points to 15.71%,and the monthly payment can rise from a first year payment of $105.69 to a maximum of $141.02 in thefourth year.To see what your payments would be at the interest rate used in the above example, divide your mortgageby $10,000, then multiply that amount by the first year payment in the previous example. For example, fora $60,000 mortgage: 60,000 ÷ 10,000 = 6; 6 x $105.69 = $634.14 per month.©CUNA Mutual Group, 1997, ALL RIGHTS RESERVEDETX08020 – LOANLINER Home Equity System

Adjustable Rate Mortgage (ARM) DisclosureAdjustable Rate Mortgage (ARM) DisclosureDocument DescriptionRegulation Z provides that if the interest rate may increase afterconsummation of a closed-end loan, the loan is considered to be a variable ratetransaction. For loans secured by the consumer’s principal dwelling certainvariable rate disclosures must be given at the time an application is providedto the borrower. (Reg. Z Section 226.19(b)). (A preferred rate loan, for example,when an employee receives a lower rate until leaving the credit union’semployment, is considered to be a variable rate.)The terms of the ARM Disclosure are individual to each credit union. AnARM Disclosure is created by the answers you give on the Texas Home EquityQuestionnaire.When Used:Purpose:How Distributed:The ARM Disclosure must be given to the borrowerwhen the borrower receives an application as requiredby Regulation Z Section 226.19(b)(2).The ARM Disclosure provides the disclosures requiredby Regulation Z Section 226.19(b)(2). This disclosurenotifies the borrower of important provisions specific toyour credit union’s variable rate home equity loans andare not transaction specific for each individualborrower’s loan.The ARM Disclosure must be sent out or otherwiseprovided with the application.No. of Parts: 1However, if the application is received by telephone, orthrough an intermediary agent or broker, the ARMdisclosure may be delivered or placed in the mail notlater than three business days following the creditunion’s receipt of the application. Also a nonrefundablefee may not be collected by the credit union until theARM Disclosure has been provided.Imprinting:Credit union name, address and variable rate featuresTexas Closed-End Information – 21

Adjustable Rate Mortgage (ARM) DisclosureAdjustable Rate Mortgage (ARM) DisclosureDocument ExplanationThe sample ARM Disclosure provided is a representative example of what acredit union’s ARM Disclosure may look like. The terms contained in yourcredit union’s ARM Disclosure may differ because of the answers your creditunion gave on the questionnaire.You may give the same ARM Disclosure to all borrowers interested inobtaining a home equity loan from your credit union. Since the ARMDisclosure is not transaction specific, there are no blank lines for the creditunion to complete before giving the ARM Disclosure to the borrower.The LOANLINER ARM Disclosure does not include a 15-year history of theindex, as the requirement was made optional by a recent amendment to Truthin Lending.An ARM disclosure for each variable rate program in which the borrowerexpresses an interest must be given at the time an application is provided orbefore the borrower pays a nonrefundable fee, whichever is earlier. TheLOANLINER ARM Disclosure provides the following disclosures:1. The fact that the interest rate and payment of the loan can change.2. The index or formula used in making adjustments, and a source ofinformation about the index or formula.3. An explanation of how the interest rate and payment will bedetermined, including an explanation of how the index is adjusted,such as by the addition of a margin.4. A statement that the borrower should ask about the current marginvalue and interest rate.5. The fact that the interest rate will be discounted, if applicable, and astatement that the borrower should ask about the amount of theinterest rate discount.6. The frequency of interest rate and payment changes.7. If applicable, any rules relating to changes in the index, interest rate,payment amount, and outstanding loan balance including, for example,an explanation of interest rate or payment limitations, negativeamortization (prohibited in Texas), and interest rate carryover.22 – LOANLINER Home Equity System

Adjustable Rate Mortgage (ARM) Disclosure8. Payment example.9. Worst case example.10. The type of information that will be provided in notices of adjustmentsand timing of such notices.11. A statement that disclosure documents are available for the creditunion’s other variable rate loan programs.Texas Closed-End Information – 23

CONSUMERHANDBOOK ONADJUSTABLERATEMORTGAGES24 – LOANLINER Home Equity System

Consumer Handbook on Adjustable Rate MortgagesConsumer Handbook on Adjustable Rate Mortgages(CHARM Booklet)Document Description(This is only required if offering a variable rate mortgage.)When Used:Purpose:How Distributed:The CHARM Booklet is required to be given to aborrower at the time the borrower obtains a homeequity application as required by Regulation ZSection 226.19(b).The CHARM Booklet provides borrowers with adiscussion of general characteristics of Adjustable RateMortgages.The CHARM Booklet, along with a copy of theAdjustable Rate Mortgage Disclosure, is given to theborrower at the same time the borrower obtains anapplication.No. of Parts: 1However, if the application is received by telephone, orthrough an intermediary agent or broker, the CHARMBooklet may be delivered or placed in the mail not laterthan three business days following the credit union’sreceipt of the application. Also a nonrefundable fee maynot be collected by the credit union until the CHARMBooklet has been provided.Imprinting:NoneTexas Closed-End Information – 25

Acknowledgment of Fair Market ValueACKNOWLEDGMENT OF FAIR MARKET VALUE______________________________________________________ (“Borrower”whether one or more) and ________________________________________________(“Credit Union”) hereby acknowledge that the property of the Borrower, having theaddress _____________________________________________________________________________________________________________________________, Texas,has a fair market value in the sum of $_______________ as of the date of the closing ofthe loan in the original principal sum of $_______________ from Credit Union to Borrower.EXECUTED this ________ day of____________________________, ________.____________________________________________(Borrower 1)____________________________________________(Borrower 2)____________________________________________(Credit Union)By: ________________________________________Printed Name: ________________________________Title:________________________________________©CUNA MUTUAL GROUP, 1997, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012 CREDIT UNION COPY ETX400 2786026 – LOANLINER Home Equity System

Acknowledgment of Fair Market ValueAcknowledgment of Fair Market ValueDocument DescriptionWhen Used: This document will be completed and signed at closing.Purpose:How Distributed:No. of Parts:Imprinting:Special Notes:The Texas Constitution requires that the credit union andthe borrower sign this Acknowledgment at closing.One copy of this document should be kept in the file andthe other should be given to the borrower.2 parts (1 page)Optional - Credit union name, address and logoThe credit union may conclusively rely on the writtenAcknowledgment as to the fair market value of theproperty as long as: (1) the value acknowledged is theestimated value in an appraisal or evaluation prepared inaccordance with any applicable state or federalrequirements and (2) the credit union does not haveactual knowledge at the time the loan is granted that thefair market value stated in the Acknowledgment isincorrect.Texas Closed-End Information – 27

Acknowledgment of Fair Market ValueACKNOWLEDGMENT OF FAIR MARKET VALUE______________________________________________________ 1(“Borrower”whether one or more) and ________________________________________________2(“Credit Union”) hereby acknowledge that the property of the Borrower, having theaddress ______________________________________________________________3_______________________________________________________________, Texas,has a fair market value in the sum of $_______________ 4 as of the date of the closing ofthe loan in the original principal sum of $_______________ 5 from Credit Union to Borrower.6EXECUTED this ________ day of____________________________, ________.78____________________________________________(Borrower 1)____________________________________________(Borrower 2)9____________________________________________(Credit Union)10By: ________________________________________Printed Name: ________________________________Title:________________________________________©CUNA MUTUAL GROUP, 1997, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012 CREDIT UNION COPY ETX400 2786028 – LOANLINER Home Equity System

Acknowledgment of Fair Market ValueCompletion Instructions1. Enter the name(s) of the borrower(s).2. Enter the name of the credit union.3. Enter the address of the property.4. Enter the fair market value of the property.5. Enter the amount of the loan.6. Enter the date this document is signed which should be the date theloan closed.7. All borrower(s) must sign.8. The borrower’s name(s) should be typed beneath the signature.9. The credit union name should be typed in.10. The name of the credit union employee present at closing should signhis/her name, enter his/her name below and enter his/her title.Texas Closed-End Information – 29

Note and Disclosure StatementBORROWER NAME (Last - First - Middle Initial) AND ADDRESS (Street - City - State - Zip Code)Note andDisclosure StatementDATE MEMBER NUMBER NOTE NUMBERFIXEDCONTRACT NUMBERREFERENCE NUMBERMATURITY DATEVARIABLEIn this agreement “you”, “your”, or “I” mean each person who signs this agreement. “Credit Union” means the credit union whose name appears above and any successorsand assigns. The terms on the reverse side are part of this agreement.TRUTH IN LENDING DISCLOSUREANNUAL PERCENTAGE RATEThe cost of your credit as a yearlyrate.FINANCE CHARGEThe dollar amount the credit willcost you.Amount FinancedThe amount of credit provided to youor on your behalf.Total of PaymentsThe amount you will have paid when youhave made all payments as scheduled.e means an estimate% $$$ Variable Rate: Your loan contains a variable rate feature. Disclosures about the variable rate feature have been provided to you earlier.YourPaymentSchedulewill be:Late Charge:SEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.NOTE CONTINUED ON REVERSE SIDEPrepayment: If you pay off early youwill not have to pay a penalty.Number of Payments Amount of Payments When Payments Are Due Property Insurance: You may obtain property insurancefrom anyone you want that is acceptable to the credit union.If you get the insurance from the credit union you will pay1. BORROWER’S PROMISE TO PAY — The following paragraph applies only if this is a fixed rate loan:You promise to pay $______________ to the Credit Union plus interest on the unpaid balance beginning on the date of the Note at ____________% peryear until what you owe has been repaid.The following paragraph applies only if this is a variable rate loan:You promise to pay $______________ to the Credit Union plus interest on the unpaid balance beginning on the date of the Note until what you owe hasbeen repaid. The initial rate of interest is ____________% per year.$Security: You are giving a securityinterest in your home.IF YOU AGREE TO MAKE AND BE BOUND BY THE TERMS OF THIS NOTE, SIGN BELOW. YOU WILL RECEIVE A COPY OF ALL DOCUMENTS YOU SIGN AT CLOSING.BORROWERBORROWERXXBORROWERBORROWERXXCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CUNA Mutual Insurance Society • Madison, WI 53701-0391 • Phone: 800/937-2644“You” or “Your” means the member and the joint insured (if applicable). Thejoint insured may only be spouses or business partners.Credit insurance is voluntary and not required in order to obtain this loan. Youmay select any insurer of your choice. You can get this insurance only if youcheck the “yes” box below and sign your name and write in the date. The rateyou are charged for the insurance is subject to change. You will receive writtennotice before any increase goes into effect. By signing below you certify that:• If you elect insurance, you authorize the credit union to add the charges forinsurance to your loan each month.YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULESINGLE CREDIT DISABILITY$ eSINGLE CREDIT LIFE$ eJOINT CREDIT LIFE$ e• You are working for wages or profit for 25 hours a week or more on the EffectiveDate. If you are off work because of temporary layoff, strike or vacation, butsoon to resume, you will be considered at work.• For Credit Life insurance, if you are not actively at work on the Effective Date,you have not, at any time during the twelve months immediately preceding theEffective Date, received a medical diagnosis or any care or treatment for cancer,high blood pressure or for any disease of the heart, lungs or blood vessels.• You are under the Maximum Age for Insurance. Insurance will be provided upto the Maximum Age.NOTE: The insurance you’re applying for contains certain terms and exclusions; Refer to your certificate for coverage details.COVERED MEMBER (Please Print)Initial Amount of Loan Insured Monthly Payment/BenefitCDCLIf you are totally disabled for at least 30 days, then thedisability benefit will begin with the 31st day of disability.Term of Certificate in Months Effective Date of CertificateCDCLINSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFIT PER LOANMAX. AMOUNT OF LOAN INSURABLE PER LOANMAX. AMOUNT OF LOAN INSURABLE PER MEMBERMAX. AGE FOR INSURANCEGROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOANXXX-XXXX-XMEMBER’S DATE OF BIRTH AGE JOINT INSURED’S DATE OF BIRTH AGE SECONDARY BENEFICIARY (If you desire to name one)Expiration Date of CertificateCDCLDISABILITY LIFE$ XXX$XX,XXXN/AXXN/AN/A$XX,XXXXXXXSIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATE(Only required if JOINT CREDIT LIFE coverage is selected)APP.325-0892/Rev. TX (3.50 3.53)© CUNA MUTUAL GROUP, 1991, 97, 2003, 04, ALL RIGHTS RESERVED PRODUCTION WITHOUT WRITTEN PERMISSION OF CUNA MUTUAL INSURANCE SOCIETY IS FORBIDDEN BY LAW. ETX303CREDIT UNION 130 – LOANLINER Home Equity System

Note and Disclosure StatementNOTE CONTINUED FROM REVERSE SIDE2. PAYMENTS — You promise to make payments in U.S. dollars of theamount and at the time shown in the Truth in Lending Disclosure until whatyou owe has been repaid. You promise to make payments at the placechosen by the Credit Union.When the loan is paid in full, within a reasonable time, the Credit Union willcancel and return the Note to you and give you, in recordable form, a releaseof the lien securing the loan or a copy of an endorsement and assignmentof the lien, whichever is appropriate.3. THIS NOTE SECURED BY A DEED OF TRUST — In addition to theprotections given to the Credit Union under this Note, a deed of trust (the“Deed of Trust”) dated the same date as this Note creates a lien against theproperty (the “Property”) described in the Deed of Trust and protects theCredit Union from possible losses which might result if you do not keep thepromises which you make in this Note. That Deed of Trust describes howand under what conditions the Note may be accelerated and madeimmediately due in full.You and the Credit Union will sign a written acknowledgment as to the fairmarket value of your property on the date this loan closes. Notwithstandinganything to the contrary in any other agreement you have with the CreditUnion, the only security for this loan is the Property described in the Deedof Trust.4. BORROWER’S FAILURE TO PAY AS REQUIRED — (A) Late Charge forOverdue Payments: If you are late in making a payment, you agree to paythe late charge shown in the Truth in Lending Disclosure. If no late chargeis shown, you will not be charged one.(B) Notice From Credit Union: If you do not pay the full amount of eachregularly scheduled payment on time, the Credit Union may send you awritten notice telling you that if you do not pay the overdue amount by acertain date you will be in default. That date will be not less than thatrequired by applicable law from the date on which the notice is mailed to youor, if it is not mailed, the date on which it is delivered to you.(C) Default: If you do not pay the overdue amount by the date stated in thenotice described in (B) above, you will be in default. If you are in default, theCredit Union may accelerate the maturity date of the outstanding principalbalance due under the Note and proceed with foreclosure of the lien againstthe Property created by the Deed of Trust. Even if, at a time when you are indefault, the Credit Union does not accelerate the maturity date of theoutstanding principal balance due under the Note and proceed withforeclosure of the lien against the property created by the Deed of Trust, asdescribed above, the Credit Union will still have the right to do so if you arein default at a later time.(D) You shall be liable for the indebtedness evidenced by this Note only to theextent of the Property described in the Deed of Trust that secures the paymentof this Note. If there is a default in the payment of such indebtedness or in theperformance of such agreements, any judicial proceedings brought by theCredit Union against you shall be limited to enforcement and foreclosure ofthe lien created by the Deed of Trust. If there is a foreclosure of such lien, nojudgment for any deficiency shall be sought or obtained by the Credit Unionagainst you. Notwithstanding the foregoing limitation of liability, you shall befully and personally liable for your actual fraud or your spouse’s actual fraudin obtaining or in connection with this Note or any instrument governing,securing or pertaining to the payment hereof.5. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST INBORROWER — If all or any part of the Property or any interest in it is soldor transferred without the Credit Union’s prior written consent, the CreditUnion may, at its option, accelerate the maturity date of the outstandingprincipal balance due under the Note and proceed with foreclosure of the lienagainst the Property created by the Deed of Trust. However, this option shallnot be exercised by the Credit Union if exercise is prohibited by federal law.If the Credit Union exercises this option, the Credit Union shall give you noticeof acceleration. The notice shall provide a period of not less than 30 daysfrom the date the notice is delivered or mailed within which you may pay allsums secured by the Deed of Trust in order to avoid the enforcement andforeclosure of the lien created by the Deed of Trust. If you fail to pay thesesums prior to the expiration of such period, the Credit Union may invoke anyremedies permitted by the Deed of Trust without further notice or demand onyou other than such notices required by law which cannot be waived.6. BORROWER’S PAYMENTS BEFORE THEY ARE DUE — You have the rightto make payments of principal at any time before they are due. A payment ofprincipal only is known as a “prepayment.” When you make a prepayment,you will tell the Credit Union in a letter that you are doing so. A prepayment ofall of the unpaid principal is known as a “full prepayment.” A prepayment ofonly part of the unpaid principal is known as a “partial prepayment.”You may make a full prepayment or a partial prepayment without paying anypenalty or other charge. The Credit Union will use all of your prepayments toreduce the amount of principal that you owe under this Note. If you make apartial prepayment, there will be no delays in the due dates or changes in theamounts of your regularly scheduled payments unless the Credit Unionagrees in writing to those delays or changes. You may make a full prepaymentat any time.7. BORROWER’S WAIVERS — Except as may be otherwise provided in thisNote or in the Deed of Trust, and subject to applicable law, you waive yourrights to require the Credit Union to do certain things. Those things are: (A)to give notice of intent to accelerate the maturity date of the outstandingprincipal balance of this Note (known as “notice of intent to accelerate”); (B)to demand payment of amounts due (known as “presentment”); (C) to givenotice that amounts due have not been paid (known as “notice of dishonor”);(D) to obtain an official certification of nonpayment (known as a “protest”).8. RESCISSION — You and your spouse may within three days afterclosing rescind this Note without penalty or charge.9. GIVING NOTICES — Any notice that must be given to you under thisNote will be given by delivering it or by mailing it to you at the address onthe reverse side. A notice will be delivered or mailed to you at a differentaddress if you give the Credit Union a notice of your different address.Any notice that must be given to the Credit Union under this Note will begiven by mailing it by certified mail to the Credit Union at the address statedon the reverse side. A notice will be mailed to the Credit Union at a differentaddress if you are given notice of that different address.10. RESPONSIBILITY OF PERSONS UNDER THIS NOTE — If more than oneperson signs this Note, each of you are obligated to keep all of the promisesmade in this Note. Any guarantor, surety or endorser of this Note (asdescribed in Section 7 above) is also obligated to do these things. Anyperson who takes over your rights or obligations under this Note will haveall of your rights and must keep all of your promises made in this Note. Anyperson who takes over the rights or obligations of a guarantor, surety orendorser of this Note (as described in Section 7 above) is also obligated tokeep all of the promises made in this Note.The Credit Union will forfeit all principal and interest on your loan if theCredit Union fails to correct any failure to comply with its obligations underthis loan in accordance with the terms of the Deed of Trust.Texas Closed-End Information – 31

Note and Disclosure StatementBENEFITSHOW TO FILEA LIFE CLAIMHOW TO FILEA TOTALDISABILITYCLAIMCONFORMITYWITH STATESTATUTESPHYSICALEXAMINATIONAND AUTOPSYWithin 15 days after you receive this Certificate, you have the rightto return the Certificate to the credit union for cancellation and anypremium paid by you will be immediately returned.We certify that while we are paid the premium for the Group Policy bythe Credit Union as they become due, you are insured for the coverageBenefits are paid to your credit union to pay off or reduce your loan.If the benefits are more than the balance of your loan, the differencewill be paid to you (by separate check from us) if you are living or tothe Beneficiary named by you, if any, or to your estate. Our paymentwill completely discharge our liability to the extent of the payment.Death Benefit. If you die while you are insured for life coverage, wewill pay the principal balance of your loan on the date of your death,not to exceed the Maximum Amount of Loan Insurable.Joint Insured Death Benefit. If your joint insured dies while insuredfor life coverage, we will pay on the same basis as above. Only one (1)death benefit, however, is payable under this Certificate.Total Disability Insurance Benefit. If you are insured for disabilitycoverage, we will pay a benefit if you file written proof that youbecame totally disabled while insured and continue to be totallydisabled for longer than the period stated in the Schedule. Paymentwill be calculated beginning with the day shown in the Schedule.The monthly benefit will be equal to one (1) Monthly Payment stated inthe Schedule for each month of your disability to be compensated, notto exceed the Maximum Monthly Total Disability Benefit. For a partialmonth, each daily benefit will be equal to 1/30th of the monthly benefit.EXCLUSIONS Misstated Age. If you stated you are under the Maximum Age forANDInsurance stated in the Schedule, but you are not, we will return yourRESTRICTIONS premium when we discover this and will not pay any benefits. Thisapplies to disability coverage as well as life coverage on you and yourjoint insured.The following Exclusion for life insurance applies also to your jointinsured.1. Suicide. We won’t pay a claim for a loan if you commit suicidewithin 12 months after the effective date of insurance shownin the Schedule. We will, however, refund the premium on theloan.WHENINSURANCESTOPSINSURANCECHARGESTHE GROUPPOLICY CANBE STOPPEDWHAT THECONTRACTIS ANDHOW YOURSTATEMENTSAFFECT ITThis insurance stops on the earliest of the following dates:1. on the expiration date of your Certificate; or2. on the last day of the month in which we receive your writtenrequest to stop the insurance; or3. on the last day of the month in which you withdraw yourauthorization for the addition of charges for the insurance toyour loan; or4. on the last day of the month during which you reach theMaximum Age for Insurance; or5. on the date your loan is paid off, renewed, or refinanced; or6. on the last day of the month in which you are three (3)The rate you are charged for the insurance is subject to change. Youwill be given 30 days advance written notice before any rate increasegoes into effect. You should attach any notice of rate change to thisIf this happens and your insurance under the group policy is notreplaced by similar insurance under a new group policy, you will beThe Group Policy, the Application for the Group Policy, any attachedRider or Endorsement, and the attached Member’s Application are thecomplete contract of insurance. All statements made by you in yourApplication are considered to have been made to the best of yourknowledge and belief. No statement can be used to void this insuranceor deny a claim unless that statement is in your signed Application.After two (2) years from the Date of your Application, no statementmade by you in your Application can be used to void this insurance orWe must be given a claim report, a copy of the member’s loan records,insurance application/certificate and a certified copy of the deathcertificate (or other lawful evidence) as proof of a life insurance claim.You must contact us or your credit union about your total disabilityclaim within twenty (20) days of when you are eligible for benefits oras soon as reasonably possible. Your credit union will provide youwith claim forms within 15 days or you can simply send us writtenproof of your disability. That proof must show the date and the causeof the Total Disability and how serious it is, and it must be signed bya physician or a chiropractor. The initial proof should be for the initialperiod of Total Disability, after you have completed the Waiting Periodor Elimination Period. After that, we will require proof of yourAny part of the Group Policy which, on the Effective Date of the GroupPolicy, conflicts with the statutes of the state where the Group PolicyWe, at our own expense, have the right, and you must allow us theopportunity, to examine your person as often as is reasonablyCertificate of InsuranceCredit LifeCredit DisabilityMonthly Premiummarked in the Schedule, subject to the terms of the Group Policyissued to the credit union.MAXIMUM AMOUNT OF LOAN INSURABLE for life insurance meansthe sum of all your loans combined and for disability insurance meanseach separate loan.Our benefit payments will stop on the date:1. you are not totally disabled any more; or if earlier,2. benefits are paid to the expiration date of your Certificate; or3. the insured portion of your loan has been repaid; or4. the balance of your loan has been paid by a lump sumdisability benefit under a credit life insurance policy; or5. of your death.Definition of Total Disability. During the first 12 consecutive months oftotal disability, Total Disability means that you are not able to perform theessential and customary duties of your occupation because of amedically determined sickness or accidental injury and are under the careand treatment of a physician. After the first 12 consecutive months ofTotal Disability, the definition changes and requires that you not be ableto perform the duties of any occupation for which you are reasonablyqualified by education, training or experience. You will be required to giveus proof of your continuing Total Disability from time to time.If your Total Disability recurs within seven (7) days after you haverecovered from that period of Total Disability, we will consider this acontinuation of that period of Total Disability. However, if your TotalDisability recurs more than seven (7) days after you have recovered,we will consider it a new period of Total Disability.The following Exclusions apply to disability insurance.Total Disabilities Not Covered. We won’t pay a claim for any loan orreturn your disability insurance premium if your Total Disability:1. commences or recommences within six (6) months after theEffective Date shown in the Schedule and results from any diseaseor bodily injury for which you received medical diagnosisor treatment at any time within the six (6) month period immediatelypreceding the Effective Date (however, after such six(6) month period, a valid claim will not be excluded); or2. is a result of normal pregnancy.months delinquent in any payment on your loan; or7. on the date the Group Policy stops; or8. when the balance of your loan has been paid by a lump sumdisability benefit under a credit life insurance policy; or9. on the date of your death; or10. on the date your loan is transferred to a creditor other thanthe credit union.Termination of insurance will be without prejudice to any valid claimarising prior to termination. The Group Policy may be terminated byus or by the credit union without prejudice to any existing claims.Certificate. You may stop this insurance on any date by giving advancewritten notice to the credit union.given written notice that your insurance will stop 30 days after thedate the notice is given to you.deny a claim. However, any fraudulent misstatements regarding creditdisability which you have made, may be contested without regard tothe two (2) year time limitation. If you stated in your Application thatyou are older than the Maximum Age for Insurance, or if insurance isissued over the Maximum Amount or over the Maximum Term, andwe do not return your premium within 90 days of the Effective Date,you are insured. We will accept a valid claim if it is incurred within this90 day period and before the premium is returned.You are responsible only for the certified copy of the death certificate.Your credit union will supply the remainder of the information.continued disability, from time to time.You must send proof to us within 90 days after your Total Disabilitystops. If you cannot send proof to us within 90 days, you must do so assoon as you can. Unless you have been legally incapable of filing proofof Total Disability, we won’t accept it if it is filed after one (1) year fromthe time it should have been filed. You can’t start any legal action until60 days after you send us proof of your Total Disability and you can’tstart any legal action more than three (3) years after you send the proof.was delivered is changed to conform to the minimum standards ofthose statutes.required while a claim is pending or make an autopsy in case of deathwhere it is not forbidden by law.B3d-325-0892/Rev. TX (3.50 3.53)BORROWER COPY OF CERTIFICATEETX30332 – LOANLINER Home Equity System

Note and Disclosure StatementNote and Disclosure StatementDocument DescriptionWhen Used:This document is used when a borrower has beenapproved for a closed-end home equity loan.Purpose:The Note and Disclosure Statement provides:• the disclosures required by Regulation ZSection 226.18, and the Texas Constitution;• the contract terms between the credit union and theborrower(s); and• the Credit Insurance Application and Certificate ofInsurance.This disclosure gives the exact terms of the individualborrower’s loan at the time of consummation.How Distributed:No. of Parts:Components:A copy of this document must be given to each borrowerand each person who has an ownership interest in thedwelling being offered as security for the loan.5 partsPart 1 – Credit union copy of Note and DisclosurePart 2 – Second credit union copy can be used for:• a person who has an ownership interest in theproperty but is not a borrower• third borrower’s copy• stamp paid when loan paid and send back toborrowerPart 3 – First borrower’s copy of Note and DisclosurePart 4 – Second borrower’s copy of Note and DisclosurePart 5 – Borrower’s copy of Credit Insurance CertificateImprinting:(Blank documents not available)Credit union name, address, logo, late charges, variablerate languageTexas Closed-End Information – 33

Note and Disclosure Statement1EVERYBODY’S CREDIT UNION101 Elm StreetAnytown, US 12345BORROWER NAME (Last - First - Middle Initial) AND ADDRESS (Street - City - State - Zip Code)2Note andDisclosure StatementDATE MEMBER NUMBER NOTE NUMBER345CONTRACT NUMBER REFERENCE NUMBER MATURITY DATEFIXED678VARIABLEIn this agreement “you”, “your”, or “I” mean each person who signs this agreement. “Credit Union” means the credit union whose name appears above and any successorsand assigns. The terms on the reverse side are part of this agreement.TRUTH IN LENDING DISCLOSUREANNUAL PERCENTAGE RATE FINANCE CHARGE Amount FinancedTotal of PaymentsPrepayment: If you pay off early youThe cost of your credit as a yearly The dollar amount the credit will The amount of credit provided to you The amount you will have paid when you will not have to pay a penalty.13rate.cost you.or on your behalf.have made all payments as scheduled.e means an estimate9% $10$11$121415 Variable Rate: Your loan contains a variable rate feature. Disclosures about the variable rate feature have been provided to you earlier.Number of Payments Amount of Payments When Payments Are Due Property Insurance: You may obtain property insurance16 Yourfrom anyone you want that is acceptable to the credit union.PaymentIf you get the insurance from the credit union you will paySchedulewill be:$1718 Late Charge:Security: You are giving a securityinterest in your home. 19SEE YOUR CONTRACT DOCUMENTS FOR ANY ADDITIONAL INFORMATION ABOUT NONPAYMENT, DEFAULT, AND ANY REQUIRED REPAYMENT IN FULL BEFORE THE SCHEDULED DATE.NOTE CONTINUED ON REVERSE SIDE20 1. BORROWER’S PROMISE TO PAY — The following paragraph applies only if this is a fixed rate loan:You promise to pay $______________ to the Credit Union plus interest on the unpaid balance beginning on the date of the Note at ____________% peryear until what you owe has been repaid.The following paragraph applies only if this is a variable rate loan:You promise to pay $______________ to the Credit Union plus interest on the unpaid balance beginning on the date of the Note until what you owe hasbeen repaid. The initial rate of interest is ____________% per year.IF YOU AGREE TO MAKE AND BE BOUND BY THE TERMS OF THIS NOTE, SIGN BELOW. YOU WILL RECEIVE A COPY OF ALL DOCUMENTS YOU SIGN AT CLOSING.BORROWERBORROWERXX21 BORROWERBORROWERXXCREDIT INSURANCE ENROLLMENT FORM/SCHEDULE CUNA Mutual Insurance Society • Madison, WI 53701-0391 • Phone: 800/937-2644“You” or “Your” means the member and the joint insured (if applicable). Thejoint insured may only be spouses or business partners.Credit insurance is voluntary and not required in order to obtain this loan. Youmay select any insurer of your choice. You can get this insurance only if youcheck the “yes” box below and sign your name and write in the date. The rateyou are charged for the insurance is subject to change. You will receive writtennotice before any increase goes into effect. By signing below you certify that:• If you elect insurance, you authorize the credit union to add the charges forinsurance to your loan each month.YOU ELECT THE FOLLOWING INSURANCE COVERAGE(S) YES NO PREMIUM SCHEDULESINGLE CREDIT DISABILITY$ eSINGLE CREDIT LIFE$ eJOINT CREDIT LIFE$ e• You are working for wages or profit for 25 hours a week or more on the EffectiveDate. If you are off work because of temporary layoff, strike or vacation, butsoon to resume, you will be considered at work.• For Credit Life insurance, if you are not actively at work on the Effective Date,you have not, at any time during the twelve months immediately preceding theEffective Date, received a medical diagnosis or any care or treatment for cancer,high blood pressure or for any disease of the heart, lungs or blood vessels.• You are under the Maximum Age for Insurance. Insurance will be provided upto the Maximum Age.NOTE: The insurance you’re applying for contains certain terms and exclusions; Refer to your certificate for coverage details.COVERED MEMBER (Please Print)Initial Amount of Loan Insured Monthly Payment/BenefitCDCLIf you are totally disabled for at least 30 days, then thedisability benefit will begin with the 31st day of disability.Term of Certificate in Months Effective Date of CertificateCDCLINSURANCE MAXIMUMSMAX. MONTHLY TOTAL DISABILITY BENEFIT PER LOANMAX. AMOUNT OF LOAN INSURABLE PER LOANMAX. AMOUNT OF LOAN INSURABLE PER MEMBERMAX. AGE FOR INSURANCEGROUP POLICY NUMBERRATE OF INTEREST USED ON THIS LOANXXX-XXXX-XMEMBER’S DATE OF BIRTH AGE JOINT INSURED’S DATE OF BIRTH AGE SECONDARY BENEFICIARY (If you desire to name one)Expiration Date of CertificateCDCLDISABILITY LIFE$ XXX$XX,XXXN/AXXN/AN/A$XX,XXXXXXXSIGNATURE OF MEMBER (Be sure to check one of the boxes above.) DATE SIGNATURE OF JOINT INSURED (CO-BORROWER) DATE(Only required if JOINT CREDIT LIFE coverage is selected)APP.325-0892/Rev. TX (3.50 3.53)© CUNA MUTUAL GROUP, 1991, 97, 2003, 04, ALL RIGHTS RESERVED PRODUCTION WITHOUT WRITTEN PERMISSION OF CUNA MUTUAL INSURANCE SOCIETY IS FORBIDDEN BY LAW. ETX303CREDIT UNION 134 – LOANLINER Home Equity System

Note and Disclosure StatementNOTE CONTINUED FROM REVERSE SIDE22 2. PAYMENTS — You promise to make payments in U.S. dollars of theamount and at the time shown in the Truth in Lending Disclosure until whatyou owe has been repaid. You promise to make payments at the placechosen by the Credit Union.When the loan is paid in full, within a reasonable time, the Credit Union willcancel and return the Note to you and give you, in recordable form, a releaseof the lien securing the loan or a copy of an endorsement and assignmentof the lien, whichever is appropriate.23 3. THIS NOTE SECURED BY A DEED OF TRUST — In addition to theprotections given to the Credit Union under this Note, a deed of trust (the“Deed of Trust”) dated the same date as this Note creates a lien against theproperty (the “Property”) described in the Deed of Trust and protects theCredit Union from possible losses which might result if you do not keep thepromises which you make in this Note. That Deed of Trust describes howand under what conditions the Note may be accelerated and madeimmediately due in full.You and the Credit Union will sign a written acknowledgment as to the fairmarket value of your property on the date this loan closes. Notwithstandinganything to the contrary in any other agreement you have with the CreditUnion, the only security for this loan is the Property described in the Deedof Trust.24 4. BORROWER’S FAILURE TO PAY AS REQUIRED — (A) Late Charge forOverdue Payments: If you are late in making a payment, you agree to paythe late charge shown in the Truth in Lending Disclosure. If no late chargeis shown, you will not be charged one.25 (B) Notice From Credit Union: If you do not pay the full amount of eachregularly scheduled payment on time, the Credit Union may send you awritten notice telling you that if you do not pay the overdue amount by acertain date you will be in default. That date will be not less than thatrequired by applicable law from the date on which the notice is mailed to youor, if it is not mailed, the date on which it is delivered to you.26 (C) Default: If you do not pay the overdue amount by the date stated in thenotice described in (B) above, you will be in default. If you are in default, theCredit Union may accelerate the maturity date of the outstanding principalbalance due under the Note and proceed with foreclosure of the lien againstthe Property created by the Deed of Trust. Even if, at a time when you are indefault, the Credit Union does not accelerate the maturity date of theoutstanding principal balance due under the Note and proceed withforeclosure of the lien against the property created by the Deed of Trust, asdescribed above, the Credit Union will still have the right to do so if you arein default at a later time.(D) You shall be liable for the indebtedness evidenced by this Note only to theextent of the Property described in the Deed of Trust that secures the paymentof this Note. If there is a default in the payment of such indebtedness or in theperformance of such agreements, any judicial proceedings brought by theCredit Union against you shall be limited to enforcement and foreclosure ofthe lien created by the Deed of Trust. If there is a foreclosure of such lien, nojudgment for any deficiency shall be sought or obtained by the Credit Unionagainst you. Notwithstanding the foregoing limitation of liability, you shall befully and personally liable for your actual fraud or your spouse’s actual fraudin obtaining or in connection with this Note or any instrument governing,securing or pertaining to the payment hereof.27 5. TRANSFER OF THE PROPERTY OR A BENEFICIAL INTEREST INBORROWER — If all or any part of the Property or any interest in it is soldor transferred without the Credit Union’s prior written consent, the CreditUnion may, at its option, accelerate the maturity date of the outstandingprincipal balance due under the Note and proceed with foreclosure of the lienagainst the Property created by the Deed of Trust. However, this option shallnot be exercised by the Credit Union if exercise is prohibited by federal law.If the Credit Union exercises this option, the Credit Union shall give you noticeof acceleration. The notice shall provide a period of not less than 30 daysfrom the date the notice is delivered or mailed within which you may pay allsums secured by the Deed of Trust in order to avoid the enforcement andforeclosure of the lien created by the Deed of Trust. If you fail to pay thesesums prior to the expiration of such period, the Credit Union may invoke anyremedies permitted by the Deed of Trust without further notice or demand onyou other than such notices required by law which cannot be waived.6. BORROWER’S PAYMENTS BEFORE THEY ARE DUE — You have the rightto make payments of principal at any time before they are due. A payment ofprincipal only is known as a “prepayment.” When you make a prepayment,you will tell the Credit Union in a letter that you are doing so. A prepayment ofall of the unpaid principal is known as a “full prepayment.” A prepayment ofonly part of the unpaid principal is known as a “partial prepayment.”You may make a full prepayment or a partial prepayment without paying anypenalty or other charge. The Credit Union will use all of your prepayments toreduce the amount of principal that you owe under this Note. If you make apartial prepayment, there will be no delays in the due dates or changes in theamounts of your regularly scheduled payments unless the Credit Unionagrees in writing to those delays or changes. You may make a full prepaymentat any time.7. BORROWER’S WAIVERS — Except as may be otherwise provided in thisNote or in the Deed of Trust, and subject to applicable law, you waive yourrights to require the Credit Union to do certain things. Those things are: (A)to give notice of intent to accelerate the maturity date of the outstandingprincipal balance of this Note (known as “notice of intent to accelerate”); (B)to demand payment of amounts due (known as “presentment”); (C) to givenotice that amounts due have not been paid (known as “notice of dishonor”);(D) to obtain an official certification of nonpayment (known as a “protest”).8. RESCISSION — You and your spouse may within three days afterclosing rescind this Note without penalty or charge.9. GIVING NOTICES — Any notice that must be given to you under thisNote will be given by delivering it or by mailing it to you at the address onthe reverse side. A notice will be delivered or mailed to you at a differentaddress if you give the Credit Union a notice of your different address.Any notice that must be given to the Credit Union under this Note will begiven by mailing it by certified mail to the Credit Union at the address statedon the reverse side. A notice will be mailed to the Credit Union at a differentaddress if you are given notice of that different address.10. RESPONSIBILITY OF PERSONS UNDER THIS NOTE — If more than oneperson signs this Note, each of you are obligated to keep all of the promisesmade in this Note. Any guarantor, surety or endorser of this Note (asdescribed in Section 7 above) is also obligated to do these things. Anyperson who takes over your rights or obligations under this Note will haveall of your rights and must keep all of your promises made in this Note. Anyperson who takes over the rights or obligations of a guarantor, surety orendorser of this Note (as described in Section 7 above) is also obligated tokeep all of the promises made in this Note.The Credit Union will forfeit all principal and interest on your loan if theCredit Union fails to correct any failure to comply with its obligations underthis loan in accordance with the terms of the Deed of Trust.2829303132Texas Closed-End Information – 35

Note and Disclosure StatementCompletion InstructionsPlease refer to the document on the preceding pages for the correspondingnumbers.1. Credit Union Information – This space is used to identify the creditunion as required by Regulation Z Section 226.18(a). If your creditunion name, address, telephone number and logo were not imprintedby CUNA Mutual, enter the applicable information here.2. Borrower Name/Address – Name and address of each borrower.3. Date – Current date.4. Member Number – Member account number.5. Note Number – Loan identification number as defined by the creditunion.6. Contract Number – Credit union’s policy number with CUNA Mutualcan be imprinted.7. Reference Number – To be used as credit union desires.8. Maturity Date – The date of the final payment for the loan.Truth in Lending DisclosureThe Truth in Lending Act requires certain disclosures be segregated from otherinformation on a closed-end home equity lending document. Regulation ZSection 226.17(a). The area labeled “Truth in Lending Disclosure” is referred toas the “Fed Box” and contains the following items:9. Annual Percentage Rate – Your credit union completes the AnnualPercentage Rate (APR) for the loan requested. Regulation ZSections 226.18(e) and 226.22.Note:The APR will be the simple interest rate when the only financecharge is interest. If finance charges other than interest are to beincluded (for example: a prepaid finance charge such as points),the APR will be different than the simple interest rate and mustbe calculated using a calculation device sufficiently sophisticatedto correctly compute the correct APR.36 – LOANLINER Home Equity System

Note and Disclosure Statement10. Finance Charge – Your credit union completes the total finance chargefor the loan as required by Regulation Z Section 226.18(d). (AlsoRegulation Z Section 226.4)Note:Any prepaid finance charge should be included in this amount.Do not put an ‘e’ for estimate in this box. The Disclosure shouldbe completed with the total finance charge known at the time ofdisclosure.11. Amount Financed – Regulation Z Section 226.18(b). Following are theitems to be included in the amount financed:a. The principal loan amount.b. Add other amounts that are financed by the lender and are not partof the finance charge. Level Rate and Monthly Renewable creditinsurance is not financed; therefore, the cost for this insuranceshould not be included in the amount financed.c. Subtract any prepaid finance charge.12. Total of Payments – The sum of the payments for the loan. RegulationZ Section 226.18(h). The total of payments should equal the sum of thepayments reflected in the payment schedule.For example: If the payment schedule has 36 payments of $100, thetotal of payments would show $3,600. The total of payments caninclude amounts that are not included in the finance charge or amountfinanced, such as credit life and credit disability insurance or escrowamounts for property taxes and insurance. It is not necessary to put an‘e’ for estimate in this box. The Disclosure should be completed withthe total payments known at the time the disclosure is prepared.13. Prepayment – Regulation Z Section 226.18(k) requires disclosure ofwhether or not there is a prepayment penalty. The Texas Constitutionprohibits a credit union from charging any prepayment penalty.Therefore, there is nothing to disclose in this box. It should be left blank.14. ’e’ Means Estimate – Any item followed by an ‘e’ indicates thatinformation necessary for an accurate disclosure is unknown to yourcredit union. The disclosure is based on the best information reasonablyavailable and the item is marked as an estimate. Regulation ZSection 226.17(c).Texas Closed-End Information – 37

Note and Disclosure Statement15. Variable Rate – If your credit union will be offering a variable ratehome equity loan, then this box must be checked. If you are only doingfixed rate lending, then this box must be left blank.16. Payment Schedule – Enter number, amount(s), and due date(s) ofpayments. It is not enough to disclose that payments are due monthly,a beginning date must also be shown. Regulation Z Section 226.18(g).If credit insurance is elected, the premium is included in the paymentamount. Also escrow amounts for property taxes and insurance may beincluded.17. Property Insurance – If your credit union sells property insurance,enter the amount of the insurance premium. The term of the insurancemust also be disclosed if it is less than the term of the loan. RegulationZ Section 226.4(d)(2) and 226.18(n). If the credit union adds collateralprotection insurance to a member’s loan if the member does not keepproperty insurance in place, it does not have to be disclosed here.18. Late Charge – The late charge language, if applicable, will beautomatically imprinted by CUNA Mutual. This language is basedupon information provided by the credit union on the questionnaire.Regulation Z Section 226.18(b).19. Security – The statement “You are giving a security interest in yourhome” is printed in this section to disclose this loan is secured by theborrower’s homestead. The Texas Constitution prohibits a credit unionfrom obtaining any other collateral for the loan.20. Promise to Pay – This is the promise to pay the principal loan amountplus interest. Depending upon whether or not this is a variable or fixedrate loan, the appropriate section should be completed. If this is avariable rate loan, the Note will be imprinted with the variable ratelanguage provided as a result of your answers to the questionnaire.21. Borrower’s Signature Area – Each borrower must sign the Note andDisclosure Statement. The credit union must type the borrower(s) namenear the signature line.22. Payments – This paragraph references the payment information in theTruth in Lending portion of the document.38 – LOANLINER Home Equity System

Note and Disclosure Statement23. This Note Secured By A Deed Of Trust – This is a statement that a Deedof Trust has been executed in conjunction with the Note. The executionof the Deed of Trust provides the credit union with its only protectionfrom possible losses if the borrower does not keep the promises madeunder the Note.24. Borrower’s Failure To Pay As Required – The borrower agrees to paylate charges that are stated in the Disclosure Statement.25. Notice From the Credit Union – This paragraph informs the borrower ifpayments are overdue, the credit union can send a notice statingoverdue payments must be paid by a specified date or the borrowerwill be in default. The paragraph also restricts how quickly the creditunion can declare a borrower to be in default.26. Default – This describes when the borrower will be in default andexplains the credit union's remedy upon default.27. Transfer of Property or a Beneficial Interest in Borrower – Thisparagraph explains that the borrower will be in default if the borrowertransfers the borrower’s interest in the property without consent of thecredit union.28. Borrower’s Payments Before They Are Due – This section describes theconditions for prepayments. This section also notifies the borrowerthere is no prepayment penalty. Further, if prepayment is made, therewill be no delays in due dates or changes in the amount of monthlypayments unless agreed to by the credit union in writing.29. Borrower’s Waivers – In this section the borrower waives any rightsrelated to the credit union's duty to give notice demanding payment.30. Rescission – This paragraph notifies the borrower of the borrower’sRight of Rescission.31. Giving Notices – This section describes how notice must be given bothfrom the credit union to the borrower and from borrower to the creditunion.32. Responsibility Of Persons Under This Note – Each person signing theNote is obligated to keep all of the promises made in the Note. Thisincludes any guarantor, surety or endorser of this note. It is importantto note that the borrower will not be held personally liable unless theborrower or the borrower’s spouse committed fraud in connection withthe Note.Texas Closed-End Information – 39

Deed of Trust - Home EquityDEED OF TRUSTHOME EQUITYTHIS DEED OF TRUST SECURES AN EXTENSION OF CREDIT AS DEFINED BY SECTION 50(a)(6),ARTICLE XVI OF THE TEXAS CONSTITUTION.NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVEOR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THATTRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLICRECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.THIS DEED OF TRUST is made this ________________ day of ______________________________, ________.The grantor is _______________________________________________________________________________________________________________________________________________________ (herein “Borrower’’ whether one or more).The trustee is ____________________________________________________________________ (herein “Trustee’’),whose address is ________________________________________________________________________________.The beneficiary is _________________________________________________________________________________________ which isorganized and existing under the laws of ________________________________________________________________,whose address is ________________________________________________________________________________________________________________________________________________________________________ (herein “Lender’’).BORROWER, in consideration of the indebtedness herein recited and the trust herein created, irrevocably grants andconveys to Trustee, in trust, with power of sale, the following described property located in the County of _________________________________________________________________, State of Texas:which has the address of __________________________________________________________________________,[Street][City]Texas ______________________________________ (herein “Property Address’’);[Zip Code]TOGETHER with all the improvements now or hereafter erected on the property, and all easements, rights,appurtenances, water rights, and fixtures now or hereafter a part of the property, all of which shall be deemed to be andremain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or theleasehold estate if this Deed of Trust is on a leasehold) are hereinafter referred to as the “Property’’;TO SECURE to Lender the repayment of the indebtedness evidenced by Borrower’s note dated ___________________________________________________________________ and extensions and renewals thereof (herein “Note’’),in the principal sum of U.S. $___________________________________________________________, with interestthereon, providing for successive periodic installments of principal and interest, with the last such installment paymentdue and payable on _____________________________________________________; the payment of all other sums,with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performanceof the covenants and agreements of Borrower herein contained. It is understood and agreed that the Note is not securedby any additional real or personal property other than the Property. Borrower represents and warrants that the Propertyis not designated for agricultural use as provided by any applicable statute governing property tax, unless such Propertyis used primarily for the production of milk.©CUNA MUTUAL GROUP, 1980, 82, 84, 86, 89, 97, 2003, 04, 05, 07, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012 PAGE 1 ETX21640 – LOANLINER Home Equity System

Deed of Trust - Home EquityBorrower covenants that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant andconvey the Property, and that the Property is unencumbered, except for encumbrances of record. Borrower representsand warrants that the indebtedness evidenced by the Note is the only debt secured by the Property except for debt madefor (i) the purchase money for the Property, or a part of such purchase money, (ii) taxes due on the Property, (iii) anowelty of partition imposed against the entirety of the Property by a court order or by a written agreement of the partiesto the partition, including a debt of one spouse in favor of the other spouse resulting from a division or an award of afamily homestead in a divorce proceeding, (iv) the refinance of a lien against the Property, including a federal tax lienresulting from the tax debt of both spouses, if the Property is a family homestead, or from the tax debt of the owner,(v) work or material used in constructing new improvements on the Property, contracted for in writing; or work ormaterial used to repair or renovate existing improvements thereon. Borrower warrants and covenants that Borrower willdefend the title to the Property against all claims and demands, subject to encumbrances of record.UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:1. Payment of Principal and Interest. Borrower shall promptly pay when due the principal and accrued interestindebtedness evidenced by the Note and late charges as provided in the Note.2. Funds for Taxes and Insurance. Subject to applicable law or a written waiver by Lender, Borrower shall pay toLender on the day payments of principal and interest are payable under the Note, until the Note is paid in full, a sum(herein “Funds’’) equal to one-twelfth of the yearly taxes and assessments (including condominium and planned unitdevelopment assessments, if any) which may attain priority over this Deed of Trust, and ground rents on the Property,if any, plus one-twelfth of yearly premium installments for hazard insurance, plus one-twelfth of yearly premiuminstallments for mortgage insurance, if any, all as reasonably estimated initially and from time to time by Lender on thebasis of assessments and bills and reasonable estimates thereof. Borrower shall not be obligated to make suchpayments of Funds to Lender to the extent that Borrower makes such payments to the holder of a prior mortgage ordeed of trust if such holder is an institutional lender.If Borrower pays Funds to Lender, the Funds shall be held in an institution the deposits or accounts of which areinsured or guaranteed by a Federal or state agency (including Lender if Lender is such an institution). Lender shall applythe Funds to pay said taxes, assessments, insurance premiums and ground rents. Lender may not charge for so holdingand applying the Funds, analyzing said account or verifying and compiling said assessments and bills, unless Lender paysBorrower interest on the Funds and applicable law permits Lender to make such a charge. Borrower and Lender mayagree in writing at the time of the execution of this Deed of Trust that interest on the Funds shall be paid to Borrower, andunless such agreement is made or applicable law requires such interest to be paid, Lender shall not be required to payBorrower any interest or earnings on the Funds. Lender shall give to Borrower, without charge, an annual accounting ofthe Funds showing credits and debits to the Funds and the purpose for which each debit to the Funds was made.If the amount of the Funds held by Lender, together with the future periodic installments of Funds payable prior tothe due dates of taxes, assessments, insurance premiums and ground rents, shall exceed the amount required to paysaid taxes, assessments, insurance premiums and ground rents as they fall due, such excess shall be, at Borrower’soption, either promptly repaid to Borrower or credited to Borrower on future periodic installments of Funds. If theamount of the Funds held by Lender shall not be sufficient to pay taxes, assessments, insurance premiums and groundrents as they fall due, Borrower shall pay to Lender any amount necessary to make up the deficiency in one or morepayments as Lender may require.Upon payment in full of all sums secured by this Deed of Trust, Lender shall promptly refund to Borrower any Fundsheld by Lender.3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender underthe Note and paragraphs 1 and 2 hereof shall be applied by Lender first in payment of amounts payable to Lender byBorrower under paragraph 2 hereof, then to interest payable on the Note, and then to the principal of the Note.4. Prior Mortgages and Deeds of Trust; Charges; Liens. Borrower shall perform all of Borrower’s obligationsunder any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust,including Borrower’s covenants to make payments when due. Borrower shall pay or cause to be paid all taxes,assessments and other charges, fines and impositions attributable to the Property which may attain a priority over thisDeed of Trust, and leasehold payments or ground rents, if any.Borrower shall promptly discharge any lien which has priority over this Deed of Trust unless Borrower: (a) agreesin writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in goodfaith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender’s opinion operateto prevent the enforcement of the lien or forfeiture of any part of the Property; or (c) secures from the holder of the lienan agreement satisfactory to Lender subordinating the lien to this Deed of Trust. If Lender determines that any part ofthe Property is subject to a lien which may attain priority over this Deed of Trust, Lender may give Borrower a noticeidentifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days ofthe giving of notice.5. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Propertyinsured against loss by fire, hazards included within the term “extended coverage”, flood and such other hazards asLender may require and in such amounts and for such periods as Lender may require.The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by Lender; provided,that such approval shall not be unreasonably withheld. All insurance policies and renewals thereof shall be in a formacceptable to Lender and shall include a standard mortgage clause in favor of and in a form acceptable to Lender. Lendershall have the right to hold the policies and renewals thereof.In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proofof loss if not made promptly by Borrower.Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repairof the Property damaged, if the restoration or repair is economically feasible. Otherwise, the proceeds from the insurancePAGE 2Texas Closed-End Information – 41

Deed of Trust - Home Equityshall be paid to the Lender as a prepayment of the outstanding principal balance of the Note. If the Property is abandonedby Borrower, or if Borrower fails to respond to Lender within 30 days from the date notice is mailed by Lender to Borrowerthat the insurance carrier offers to settle a claim for insurance benefits, then Lender is authorized to collect and apply theinsurance proceeds to restoration or repair of the Property or apply the insurance proceeds as a prepayment of theoutstanding principal balance of the Note.If under paragraph 17 the Property is acquired by Lender, Borrower’s right to any insurance policies and proceedsresulting from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums securedby this Deed of Trust immediately prior to the acquisition.6. Preservation and Maintenance of Property; Leaseholds; Condominiums; Planned Unit Developments.Borrower shall keep the Property in good repair and shall not damage, commit waste or permit impairment ordeterioration of the Property. If this Deed of Trust is on a leasehold, Borrower shall comply with the provisions of suchlease, and if Borrower acquires fee title to the Property, the leasehold and fee title shall not merge unless Lender agreesto the merger in writing. If this Deed of Trust is on a unit in a condominium or a planned unit development, Borrowershall perform all of Borrower’s obligations under the declaration or covenants creating or governing the condominiumor planned unit development, the by-laws and regulations of the condominium or planned unit development, andconstituent documents.7. Protection of Lender’s Security. If Borrower fails to perform the covenants and agreements contained in thisDeed of Trust or in any other instrument creating a valid prior lien against the Property, or if any action or proceedingis commenced which may materially affect Lender’s rights or interest in the Property (such as a proceeding inbankruptcy, probate, for condemnation, foreclosure of a prior valid lien against the property, or to enforce lawsor regulations), then Lender, at Lender’s option, may do and pay for whatever is necessary to protect the value of theProperty and Lender’s rights in the Property. Lender’s actions may include paying any sums secured by a lien which haspriority over this Deed of Trust, appearing in court, paying reasonable attorneys’ fees and entering on the Property tomake repairs. Although Lender may take action under this paragraph 7, Lender does not have to do so. If Lenderrequired mortgage insurance as a condition of making the loan secured by this Deed of Trust, Borrower shall pay thepremiums required to maintain such insurance in effect until such time as the requirement for such insuranceterminates in accordance with Borrower’s and Lender’s written agreement or applicable law.8. Inspection. Lender may make or cause to be made reasonable entries upon and inspections of the Property,provided that Lender shall give Borrower notice prior to any such inspection specifying reasonable cause therefor relatedto Lender’s interest in the Property.9. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection withany condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of condemnation, shall bepaid to the Lender as a prepayment of the outstanding principal balance of the Note.10. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment ormodification of amortization of the sums secured by this Deed of Trust granted by Lender to any successor in interestof Borrower shall not operate to release, in any manner, the liability of the original Borrower or Borrower’s successorsin interest. Lender shall not be required to commence proceedings against such successor or refuse to extend time forpayment or otherwise modify amortization of the sums secured by this Deed of Trust by reason of any demand madeby the original Borrower or Borrower’s successors in interest. Any forbearance by Lender in exercising any right orremedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any suchright or remedy.11. Successors and Assigns Bound; Joint and Several Liability; Co-signers. The covenants and agreementsherein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of Lenderand Borrower, subject to the provisions of paragraph 16 hereof. All covenants and agreements of Borrower shall be jointand several. Any Borrower who co-signs this Deed of Trust, but does not execute the Note, (a) is co-signing this Deedof Trust only to grant and convey that Borrower’s interest in the Property to Trustee under the terms of this Deed ofTrust, (b) is not personally liable on the Note or under this Deed of Trust, and (c) agrees that Lender and any otherBorrower hereunder may agree to extend, modify, forbear, or make any other accommodations with regard to the termsof this Deed of Trust or the Note, without that Borrower’s consent and without releasing that Borrower or modifying thisDeed of Trust as to that Borrower’s interest in the Property.12. Legislation Affecting Lender’s Rights. If enactment or expiration of applicable laws has the effect of renderingany provision of the Note or this Deed of Trust unenforceable according to its terms, Lender, at its option, mayimmediately accelerate the maturity date of the outstanding principal balance due under the Note and may invoke anyremedies permitted by paragraph 17.13. Notices. Except for any notice required under applicable law to be given in another manner, (a) any notice toBorrower provided for in this Deed of Trust shall be given by delivering it or by mailing such notice addressed toBorrower at the Property Address or at such other address as Borrower may designate by notice to Lender as providedherein, and (b) any notice to Lender shall be given by First class mail to Lender’s address stated herein or to such otheraddress as Lender may designate by notice to Borrower as provided herein. Any notice provided for in this Deed of Trustshall be deemed to have been given to Borrower or Lender when given in the manner designated herein.14. Governing Law; Severability; Costs. The state and local laws applicable to this Deed of Trust shall be the lawsof the jurisdiction in which the Property is located. The foregoing sentence shall not limit the applicability of Federal lawto this Deed of Trust. In the event that any provision or clause of this Deed of Trust or the Note conflicts with applicablelaw, such conflict shall not affect other provisions of this Deed of Trust or the Note which can be given effect withoutthe conflicting provision, and to this end the provisions of this Deed of Trust and the Note are declared to be severable.Further, in the event any provision or clause of the Note or this Deed of Trust conflicts with applicable law, this Deed ofTrust and the Note shall be interpreted and construed as if such provision had never been contained herein and shall bereformed to delete such provision. As used herein, “costs’’, “expenses’’ and “attorneys’ fees’’ include all sums to thePAGE 342 – LOANLINER Home Equity System

Deed of Trust - Home Equityextent not prohibited by applicable law or limited herein.15. Borrower’s Copies. Borrower shall be furnished copies of all documents signed by Borrower at the time ofexecution of the Note and this Deed of Trust.16. Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property or any interestin it is sold or transferred without Lender’s prior written consent, Lender may, at its option, accelerate the maturity dateof the outstanding principal balance due under the Note and proceed with foreclosure of the lien against the Propertycreated by this Deed of Trust. However, this option shall not be exercised by Lender if exercise is prohibited by federalor state law.If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a periodof not less than 30 days from the date the notice is delivered or mailed within which Borrower may pay all sums securedby this Deed of Trust in order to avoid the enforcement and foreclosure of the lien created by the Deed of Trust. IfBorrower fails to pay these sums prior to the expiration of the 30 day period, Lender may invoke any remedies permittedby this Deed of Trust without further notice or demand on Borrower.17. Foreclosure of Lien. Lender shall give notice to Borrower prior to acceleration of the principal amount dueunder the Note following Borrower’s default in making any payment due under the Note, and to the extent permitted bylaw, upon Borrower’s default of any covenant or agreement of Borrower in this Deed of Trust (but not prior toacceleration under paragraphs 12 and 16 unless applicable law provides otherwise). The notice shall specify: (1) thedefault; (2) the action required to cure such default; (3) a date, not less than that required by applicable law from thedate the notice is given to Borrower, by which such default must be cured; and (4) that failure to cure such default onor before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and saleof the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bringa court action to assert the nonexistence of a default or any other defense of Borrower to acceleration and sale. If thedefault is not cured on or before the date specified in the notice, Lender, at Lender’s option, may to the extent permittedby law accelerate the debt and declare all of the sums secured by this Deed of Trust to be immediately due and payablewithout further demand and may to the extent permitted by law, invoke the power of sale and foreclose the lien of thisDeed of Trust upon court order and pursue any other remedies permitted by applicable law. To the extent permitted bylaw, Lender shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided inthis paragraph 17, including, but not limited to, reasonable attorneys’ fees.Lender may, at its option, follow any rules of civil procedure promulgated by the Texas Supreme Court for expeditedforeclosure proceedings related to the foreclosure of liens under Section 50(a)(6), Article XVI of the Texas Constitution(“Rules”), as amended from time to time, which are hereby incorporated by reference. The power of sale granted hereinshall be exercised pursuant to such Rules, and Borrower understands that such power of sale is not a confession ofjudgment or a power of attorney to confess judgment or to appear for the Borrower in a judicial proceeding.Power of Sale. It is the express intention of Lender and Borrower that Lender shall have a fully enforceable lien onthe Property. It is also the express intention of the Lender and Borrower that Lender’s default remedies shall include themost expeditious means of foreclosure available by law. Accordingly, the Lender and Trustee shall have all the powersprovided herein except insofar as may be limited by the Texas Supreme Court. If Lender invokes the power of sale,Lender or Trustee shall give notice of the time, place and terms of sale by posting and filing the notice at least 21 daysprior to sale as provided by applicable law. Lender shall provide a copy of the notice of sale to Borrower in the mannerprescribed by applicable law. Sale shall be made at public venue between the hours of 10 a.m. and 4 p.m. on the firstTuesday of the month. Borrower authorizes Trustee to sell the Property to the highest bidder for cash in one or moreparcels and in any order Trustee determines. Lender or its designee may purchase the Property at any sale. In the eventof any conflict between such procedure and the Rules, the Rules shall prevail, and this provision shall automatically bereformed to the extent necessary to comply.Trustee shall deliver to the purchaser a Trustee’s deed conveying indefeasible title to the Property so sold withcovenants of general warranty. Borrower covenants and agrees to defend the purchaser’s title to the Property against allclaims and demands. The recitals in the Trustee’s deed shall be prima facie evidence of the truth of the statements madetherein. Trustee shall apply the proceeds of the sale in the following order: (a) to the extent permitted by law, to all costsand expenses of the sale, including, but not limited to, reasonable Trustee’s and attorneys’ fees and costs of title evidence;(b) to all sums secured by this Deed of Trust; and (c) the excess, if any, to the person or persons legally entitled thereto.If the Property is sold pursuant to this paragraph 17, Borrower or any person holding possession of the Propertythrough Borrower shall immediately surrender possession of the Property to the purchaser at such sale. If possessionis not surrendered, Borrower or such person shall be a tenant at sufferance and may be removed by writ of possession.18. Borrower’s Right to Reinstate. Notwithstanding Lender’s acceleration of the sums secured by this Deed ofTrust due to Borrower’s default, Borrower shall have the right to have any proceedings begun by Lender to enforce thisDeed of Trust discontinued at any time prior to the earlier to occur of (i) the fifth day before sale of the Property or (ii)entry of a judgment enforcing this Deed of Trust if: (a) Borrower pays Lender all sums which would be then due underthis Deed of Trust and the Note had no acceleration occurred; (b) Borrower cures all defaults of any other covenants oragreements of Borrower contained in this Deed of Trust; (c) Borrower pays all reasonable expenses incurred by Lenderand Trustee in enforcing the covenants and agreements of Borrower contained in this Deed of Trust, and in enforcingLender’s and Trustee’s remedies as provided in paragraph 17 hereof, including, but not limited to, reasonable attorneys’fees; and (d) Borrower takes such action as Lender may reasonably require to assure that the lien of this Deed of Trust,Lender’s interest in the Property and Borrower’s obligation to pay the sums secured by this Deed of Trust shall continueunimpaired. Upon such payment and cure by Borrower, this Deed of Trust and the obligations secured hereby shallremain in full force and effect as if no acceleration had occurred. Notwithstanding the foregoing, Borrower shall haveno right to discontinue any proceedings or reinstate this Deed of Trust upon an acceleration pursuant to paragraphs 12or 16 of this Deed of Trust.PAGE 4Texas Closed-End Information – 43

Deed of Trust - Home Equity19. Limitation on Personal Liability of Borrower. Borrower shall be liable for the indebtedness evidenced by theNote only to the extent of the Property described in this Deed of Trust that secures the payment of the Note. If thereis a default in the payment of such indebtedness or in the performance of such agreements, any judicial proceedingsbrought by Lender against Borrower shall be limited to the protection of the Property and the enforcement andforeclosure of the lien created by this Deed of Trust. If there is a foreclosure of such lien, no judgment for any deficiencyshall be sought or obtained by Lender against Borrower. Notwithstanding the foregoing limitation of liability, Borrowershall be fully and personally liable for Borrower’s or Borrower’s spouse’s actual fraud made in or in connection with theNote, this Deed of Trust or any instrument governing, securing or pertaining to the payment hereof.20. No Assignment of Rents. Borrower shall not transfer or assign any rents of the Property, except for a transferor assignment of rents to the holder of a valid existing or prior lien against the Property. Any attempted or purportedassignment of rents of the Property by Borrower in violation of this paragraph shall be null and void.21. Release. Upon payment of all sums secured by this Deed of Trust, Lender shall within a reasonable time andwithout charge to Borrower, cancel and return the Note to the Borrower and provide Borrower, in recordable form, arelease of the lien of this Deed of Trust or a copy of an endorsement and assignment of the lien to a lender that isrefinancing the indebtedness secured by this Deed of Trust. Borrower shall pay any costs of recordation of such releaseor assignment.22. Substitute Trustee. Lender, at Lender’s option, and with or without cause, may from time to time removeTrustee and appoint a successor trustee to any Trustee appointed hereunder by an instrument recorded in the county inwhich this Deed of Trust is recorded. The successor trustee shall succeed to all the title, power and duties conferredupon Trustee herein and by applicable law.23. Subrogation. Any of the proceeds of the Note utilized to take up outstanding liens against all or any part of theProperty have been advanced by Lender at Borrower’s request and upon Borrower’s representation that such amountsare due and are secured by valid liens against the Property. Lender shall be subrogated to any and all rights, superiortitles, liens and equities owned or claimed by any owner or holder of any outstanding liens and debts, regardless ofwhether said liens or debts are acquired by Lender by assignment or are released by the holder thereof upon payment.24. Waiver of Notice of Intention to Accelerate. Except as otherwise provided in paragraph 17, Borrower waivesthe right to notice of intention to require immediate payment in full of all sums secured by this Deed of Trust.25. Lender’s Right-to-Comply. It is Lender’s and Borrower’s intention to conform strictly to provisions of the TexasConstitution applicable to extensions of credit as defined by Section 50(a)(6), Article XVI of the Texas Constitution.All agreements between Lender and Borrower are hereby expressly limited so that in no event shall any agreementbetween Lender and Borrower, or between either of them and any third party, be construed not to allow Lender the rightto comply, as provided in this Paragraph 25, with Lender’s obligations under the extension of credit hereunder(“Extension of Credit”). Borrower understands that the Extension of Credit is being made on the condition that Lendershall have the right to comply, as provided in this Paragraph 25, with any of the provisions of the Texas Constitutionapplicable to extensions of credit as defined by Section 50(a)(6), Article XVI of the Texas Constitution. As a preconditionto taking any action premised on failure of Lender to comply, Borrower will advise Lender of the noncompliance by anotice given as required by Paragraph 13, and Lender shall have the right to comply as provided in keeping with Section50(a)(6), Article XVI of the Texas Constitution. Borrower will cooperate in reasonable efforts to effectuate any compliance.All agreements between Lender and Borrower are expressly limited so that any interest, loan charge or fee collectedor to be collected (other than by payment of interest) from Borrower, any owner or the spouse of any owner of theProperty in connection with the origination, evaluation, maintenance, recording, insuring or servicing of the Extensionof Credit shall not exceed, in the aggregate, the highest amount allowed by applicable law.If a law, which applies to this loan and which sets maximum interest, loan charges or fees is finally interpreted sothat the interest, loan charges or fees that the Lender has collected or is entitled to collect in connection with this loanexceed the permitted limits, or a determination is made at any time by Lender that interest, loan charges or fees thatthe Lender has collected or is entitled to collect in connection with this loan exceed the permitted limit, then: (i) anysuch interest, loan charges or fees shall be reduced by the amount necessary to reduce the interest, loan charges orfees to the permitted limit; and (ii) any sums already collected from Borrower which exceeded permitted limits will berefunded to Borrower. The Lender may choose to make this refund by reducing the principal Borrower owes under theNote or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partialprepayment. Any such action by Lender will be made in accordance with this Paragraph 25 and Article XVI, Section50(a)(6) of the Texas Constitution.Lender’s right-to-comply as provided in this Paragraph 25 shall survive the payoff of the Extension of Credit.The provision of this Paragraph 25 shall supersede any inconsistent provision of the Note or this Deed of Trust.BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Deed of Trust and inany rider(s) executed by Borrower and recorded with it.____________________________________________ (Seal)(Borrower)_____________________________________________Name of Borrower, Typed or Printed____________________________________________ (Seal)(Borrower)_____________________________________________Name of Borrower, Typed or Printed_______________________________________________ (Seal)(Spouse, if not a Borrower)________________________________________________________Name of Spouse, Typed or Printed_______________________________________________ (Seal)(Spouse, if not a Borrower)________________________________________________________Name of Spouse, Typed or PrintedPAGE 544 – LOANLINER Home Equity System

Deed of Trust - Home EquityUse this acknowledgment for individual(s) acting on her/his own behalf.State of TexasCounty of ________________________________________This instrument was acknowledged before me on _____________________________________________ by(date)________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(name(s) of person(s))______________________________________________________Signature of Notarial Officer(Seal, if any)My Commission expires:______________________________________________________Notary Name Typed, Printed or Stamped______________________________________________________Title (and Rank)Use this acknowledgment for individual(s) acting in a representative capacity (e.g., as a trustee for a trust).State of TexasCounty of ________________________________________This instrument was acknowledged before me on _____________________________________________ by(date)__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(name(s) of person(s)) as______________________________________________________________________________________________________________(type of authority, e.g., officer, trustee, etc.) of____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(name of party on behalf of whom instrument was executed)______________________________________________________Signature of Notarial Officer(Seal, if any)My Commission expires:______________________________________________________Notary Name Typed, Printed or Stamped______________________________________________________Title (and Rank)PAGE 6Texas Closed-End Information – 45

Deed of Trust - Home EquityDeed of Trust - Home EquityDocument DescriptionWhen Used:A Deed of Trust is used whenever a security interest istaken by the credit union in a borrower’s real estate. ThisDeed of Trust is to be used exclusively for closed-endhome equity loans in Texas.Purpose:How Distributed:No. of Parts:Imprinting:The security instrument gives the credit union the rightto foreclose on a borrower’s home if the borrower is indefault.The credit union should retain the original securityinstrument for recording. Consequently, the documentwill have to be photocopied for distribution to theappropriate parties. The borrower must receive a copy ofthe signed Deed of Trust at closing.1 partNone46 – LOANLINER Home Equity System

Texas Closed-End Information – 47

Deed of Trust - Home EquityDEED OF TRUSTHOME EQUITYTHIS DEED OF TRUST SECURES AN EXTENSION OF CREDIT AS DEFINED BY SECTION 50(a)(6),ARTICLE XVI OF THE TEXAS CONSTITUTION.NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVEOR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THATTRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLICRECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.THIS DEED OF TRUST is made this ________________ 1day of ______________________________, ________.The grantor is ___________________________________________________________________________________________2____________________________________________________________ (herein “Borrower’’ whether one or more).The trustee is ____________________________________________________________________ 3(herein “Trustee’’),whose address is ________________________________________________________________________________.4The beneficiary is _________________________________________________________________________________________ 5which isorganized and existing under the laws of ________________________________________________________________,6whose address is _____________________________________________________________________________________________________________________________7___________________________________________ (herein “Lender’’).BORROWER, in consideration of the indebtedness herein recited and the trust herein created, irrevocably grants andconveys to Trustee, in trust, with power of sale, the following described property located in the County of ____________8_____________________________________________________, State of Texas:9which has the address of __________________________________________________________________________,10[Street][City]Texas ______________________________________ 11(herein “Property Address’’);[Zip Code]TOGETHER with all the improvements now or hereafter erected on the property, and all easements, rights,appurtenances, water rights, and fixtures now or hereafter a part of the property, all of which shall be deemed to be andremain a part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or theleasehold estate if this Deed of Trust is on a leasehold) are hereinafter referred to as the “Property’’;TO SECURE to Lender the repayment of the indebtedness evidenced by Borrower’s note dated _______________12____________________________________________________ and extensions and renewals thereof (herein “Note’’),in the principal sum of U.S. $___________________________________________________________, 13with interestthereon, providing for successive periodic installments of principal and interest, with the last such installment paymentdue and payable on _____________________________________________________; 14the payment of all other sums,with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performanceof the covenants and agreements of Borrower herein contained. It is understood and agreed that the Note is not securedby any additional real or personal property other than the Property. Borrower represents and warrants that the Propertyis not designated for agricultural use as provided by any applicable statute governing property tax, unless such Propertyis used primarily for the production of milk.©CUNA MUTUAL GROUP, 1980, 82, 84, 86, 89, 97, 2003, 04, 05, 07, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012 PAGE 1 ETX21648 – LOANLINER Home Equity System

Deed of Trust - Home Equity19. Limitation on Personal Liability of Borrower. Borrower shall be liable for the indebtedness evidenced by theNote only to the extent of the Property described in this Deed of Trust that secures the payment of the Note. If thereis a default in the payment of such indebtedness or in the performance of such agreements, any judicial proceedingsbrought by Lender against Borrower shall be limited to the protection of the Property and the enforcement andforeclosure of the lien created by this Deed of Trust. If there is a foreclosure of such lien, no judgment for any deficiencyshall be sought or obtained by Lender against Borrower. Notwithstanding the foregoing limitation of liability, Borrowershall be fully and personally liable for Borrower’s or Borrower’s spouse’s actual fraud made in or in connection with theNote, this Deed of Trust or any instrument governing, securing or pertaining to the payment hereof.20. No Assignment of Rents. Borrower shall not transfer or assign any rents of the Property, except for a transferor assignment of rents to the holder of a valid existing or prior lien against the Property. Any attempted or purportedassignment of rents of the Property by Borrower in violation of this paragraph shall be null and void.21. Release. Upon payment of all sums secured by this Deed of Trust, Lender shall within a reasonable time andwithout charge to Borrower, cancel and return the Note to the Borrower and provide Borrower, in recordable form, arelease of the lien of this Deed of Trust or a copy of an endorsement and assignment of the lien to a lender that isrefinancing the indebtedness secured by this Deed of Trust. Borrower shall pay any costs of recordation of such releaseor assignment.22. Substitute Trustee. Lender, at Lender’s option, and with or without cause, may from time to time removeTrustee and appoint a successor trustee to any Trustee appointed hereunder by an instrument recorded in the county inwhich this Deed of Trust is recorded. The successor trustee shall succeed to all the title, power and duties conferredupon Trustee herein and by applicable law.23. Subrogation. Any of the proceeds of the Note utilized to take up outstanding liens against all or any part of theProperty have been advanced by Lender at Borrower’s request and upon Borrower’s representation that such amountsare due and are secured by valid liens against the Property. Lender shall be subrogated to any and all rights, superiortitles, liens and equities owned or claimed by any owner or holder of any outstanding liens and debts, regardless ofwhether said liens or debts are acquired by Lender by assignment or are released by the holder thereof upon payment.24. Waiver of Notice of Intention to Accelerate. Except as otherwise provided in paragraph 17, Borrower waivesthe right to notice of intention to require immediate payment in full of all sums secured by this Deed of Trust.25. Lender’s Right-to-Comply. It is Lender’s and Borrower’s intention to conform strictly to provisions of the TexasConstitution applicable to extensions of credit as defined by Section 50(a)(6), Article XVI of the Texas Constitution.All agreements between Lender and Borrower are hereby expressly limited so that in no event shall any agreementbetween Lender and Borrower, or between either of them and any third party, be construed not to allow Lender the rightto comply, as provided in this Paragraph 25, with Lender’s obligations under the extension of credit hereunder(“Extension of Credit”). Borrower understands that the Extension of Credit is being made on the condition that Lendershall have the right to comply, as provided in this Paragraph 25, with any of the provisions of the Texas Constitutionapplicable to extensions of credit as defined by Section 50(a)(6), Article XVI of the Texas Constitution. As a preconditionto taking any action premised on failure of Lender to comply, Borrower will advise Lender of the noncompliance by anotice given as required by Paragraph 13, and Lender shall have the right to comply as provided in keeping with Section50(a)(6), Article XVI of the Texas Constitution. Borrower will cooperate in reasonable efforts to effectuate any compliance.All agreements between Lender and Borrower are expressly limited so that any interest, loan charge or fee collectedor to be collected (other than by payment of interest) from Borrower, any owner or the spouse of any owner of theProperty in connection with the origination, evaluation, maintenance, recording, insuring or servicing of the Extensionof Credit shall not exceed, in the aggregate, the highest amount allowed by applicable law.If a law, which applies to this loan and which sets maximum interest, loan charges or fees is finally interpreted sothat the interest, loan charges or fees that the Lender has collected or is entitled to collect in connection with this loanexceed the permitted limits, or a determination is made at any time by Lender that interest, loan charges or fees thatthe Lender has collected or is entitled to collect in connection with this loan exceed the permitted limit, then: (i) anysuch interest, loan charges or fees shall be reduced by the amount necessary to reduce the interest, loan charges orfees to the permitted limit; and (ii) any sums already collected from Borrower which exceeded permitted limits will berefunded to Borrower. The Lender may choose to make this refund by reducing the principal Borrower owes under theNote or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partialprepayment. Any such action by Lender will be made in accordance with this Paragraph 25 and Article XVI, Section50(a)(6) of the Texas Constitution.Lender’s right-to-comply as provided in this Paragraph 25 shall survive the payoff of the Extension of Credit.The provision of this Paragraph 25 shall supersede any inconsistent provision of the Note or this Deed of Trust.BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Deed of Trust and inany rider(s) executed by Borrower and recorded with it.____________________________________________ 15(Seal)(Borrower)_____________________________________________Name of Borrower, Typed or Printed____________________________________________ (Seal)(Borrower)_____________________________________________Name of Borrower, Typed or Printed_______________________________________________ (Seal)(Spouse, if not a Borrower)________________________________________________________Name of Spouse, Typed or Printed_______________________________________________ (Seal)(Spouse, if not a Borrower)________________________________________________________Name of Spouse, Typed or PrintedPAGE 5Texas Closed-End Information – 49

Deed of Trust - Home EquityUse this acknowledgment for individual(s) acting on her/his own behalf.State of TexasCounty of ________________________________________16This instrument was acknowledged before me on _____________________________________________ 17by(date)______________________________________________________________________________________________________________18__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(name(s) of person(s))20(Seal, if any)1921______________________________________________________Signature of Notarial Officer______________________________________________________Notary Name Typed, Printed or Stamped22______________________________________________________Title (and Rank)My Commission expires:23Use this acknowledgment for individual(s) acting in a representative capacity (e.g., as a trustee for a trust).State of TexasCounty of ________________________________________24This instrument was acknowledged before me on _____________________________________________ 25by(date)______________________________________________________________________________________________________________26____________________________________________________________________________________________________________________________________________________________________________________________________________________________(name(s) of person(s)) as______________________________________________________________________________________________________________27(type of authority, e.g., officer, trustee, etc.) of__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________28__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(name of party on behalf of whom instrument was executed)30(Seal, if any)2931______________________________________________________Signature of Notarial Officer______________________________________________________Notary Name Typed, Printed or Stamped32______________________________________________________Title (and Rank)My Commission expires:33PAGE 650 – LOANLINER Home Equity System

Deed of Trust - Home EquityCompletion InstructionsThe first paragraph of the Deed of Trust contains blank lines which must becompleted by your credit union.1. Enter the date the security instrument is signed. The Note andDisclosure Statement and the Deed of Trust should be dated the sameday so it is clear they are a part of the same transaction.2. Name of each grantor (borrower/owner) and the spouse of eachborrower/owner who will be signing the Deed of Trust. In most casesthe borrower(s) who signed the Note will be the person(s) who sign(s)the Deed of Trust. It is possible the owner of the property may not be aborrower. Additionally, the spouse of each borrower/owner of theproperty must sign the Deed of Trust.Real estate law requires accuracy in the form of the names used. Tokeep public real estate records accurate so title to real estate is clear, theform of a person’s name should be the same on all documents relatingto a particular piece of real estate. For example, if William Q. Jones isthe name used when the borrower first purchased the property, thenthe name used on the Note and Disclosure Statement and Deed of Trustshould be William Q. Jones. The borrower should sign as William Q.Jones, not Bill Jones or William Jones.3. Name of the trustee.4. Address of the trustee.5. The name of the credit union.6. If the credit union is state chartered, enter the applicable state ofincorporation; if federally chartered, enter United States Federal CreditUnion Act.7. Address of the credit union.8. County, judicial district or recording district where the property islocated.9. Legal description of the property.10. Street address, including city or town where the property is located.11. Zip code where the property is located.12. Date of the Note and Disclosure Statement (should be the same date asappears on the Deed of Trust).13. Dollar amount of the loan.14. The maturity date of the loan. Date the total balance of indebtedness onthe loan is to be repaid.Texas Closed-End Information – 51

Deed of Trust - Home Equity15. Signature of the borrower(s)/owner(s). Additionally, the signature ofthe borrower’s/owner’s spouse is required by the Texas Constitution.Use this section if acknowledgment is for individuals:16. County in which the property is located.17. day/month/year18. Name(s) of the borrower(s)/owner(s) and the names of the spouses ofthe borrowers/owners.19. Signature of the notary public.20. Seal of the notary public.21. Typed, printed, stamped name of notary public.22. Title of notary public.23. Enter notary commission expiration date.Use this section if acknowledgment is for a representative capcity:24. County in which the property is located.25. day/month/year26. Enter names of representative capacity (i.e. trust name)27. Enter type of authority for acknowledgment.28. Enter name of the party on behalf of who instrument was executed.29. Signature of the notary public.30. Seal of the notary public.31. Typed, printed, stamped name of notary public.32. Title of notary public.33. Enter notary commission expiration date.52 – LOANLINER Home Equity System

Texas Closed-End Information – 53

Receipt of All Documents Signed at ClosingRECEIPT OF ALL DOCUMENTS SIGNED AT CLOSING__________________________________________________________________, Borrower(s)hereby acknowledge receipt of a copy of the following documents dated and signed by Borrower(s) on this________ day of ____________________________________, ________:Note and Disclosure Statement or Credit Agreement, AddendumDeed of TrustAcknowledgment of Fair Market ValueHUD 1-A Settlement Statement (if closed-end loan)Acknowledgment of Receipt of Notice of Right to CancelOther__________________________________________________________________Other________________________________________________________________________________________________________________(Borrower 1)______________________________________________(Borrower 2)©CUNA MUTUAL GROUP, 1997, 2003, 04, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012 CREDIT UNION COPY ETX70254 – LOANLINER Home Equity System

Receipt of All Documents Signed at ClosingReceipt of All Documents Signed at ClosingDocument DescriptionWhen Used:This document is to be signed at closing after all otherdocuments have been signed and copies have beenprovided to the borrower.Purpose:How Distributed:No. of Parts:Components:Imprinting:The Texas Constitution requires that the borrower beprovided a copy of all documents borrower signed atclosing. Therefore, this Receipt provides verification thatborrower has received all such copies.A copy of this document should be kept in the file, and acopy should be given to the borrower.2 partsPart 1 - credit union copyPart 2 - borrower copyOptional - Credit union name, address, telephonenumber and logoTexas Closed-End Information – 55

Receipt of All Documents Signed at ClosingRECEIPT OF ALL DOCUMENTS SIGNED AT CLOSING__________________________________________________________________, 1Borrower(s)hereby acknowledge receipt of a copy of the following documents dated and signed by Borrower(s) on this________ 2 day of ____________________________________, ________:3Note and Disclosure Statement or Credit Agreement, AddendumDeed of TrustAcknowledgment of Fair Market ValueHUD 1-A Settlement Statement (if closed-end loan)Acknowledgment of Receipt of Notice of Right to CancelOther__________________________________________________________________Other________________________________________________________________________________________________________________4(Borrower 1)______________________________________________(Borrower 2)©CUNA MUTUAL GROUP, 1997, 2003, 04, ALL RIGHTS RESERVEDTO ORDER: 1-800-356-5012 CREDIT UNION COPY ETX70256 – LOANLINER Home Equity System

Receipt of All Documents Signed at ClosingCompletion Instructions1. Enter the names of all borrowers.2. Enter the closing date.3. If the credit union has the borrower(s) sign any documents in additionto those already listed, those should be entered next to “other.”4. Borrower(s) must sign. It would also be helpful to type the name ofeach borrower under the signature line.Texas Closed-End Information – 57