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                                                                    EXHIBIT 4.21
                              DECLARATION OF TRUST
                                       OF
                              HFC CAPITAL TRUST III

      THIS DECLARATION OF TRUST is made as of March 22, 2002 (this
"Declaration"), by and between Hawthorne Financial Corporation, a Delaware
corporation, as sponsor (the "Sponsor"), and Wilmington Trust Company, a
Delaware banking corporation, as Delaware trustee (the "Trustee"). The Sponsor
and the Trustee hereby agree as follows:

      1. The trust created hereby shall be known as "HFC Capital Trust III" (the
"Trust"), in which name the Trustee or the Sponsor, to the extent provided
herein, may conduct the business of the Trust, make and execute contracts, and
sue and be sued.

      2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. The Trustee hereby acknowledges receipt of such amount in
trust from the Sponsor, which amount shall constitute the initial trust estate.
The Trustee hereby declares that it will hold the trust estate in trust for the
Sponsor. It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C Section 3801, et seq. (the "Business Trust Act"), and that this
Declaration constitute the governing instrument of the Trust. The Trustee is
hereby authorized and directed to execute and file a certificate of trust with
the Secretary of State of the State of Delaware in the form attached to this
Declaration.

      3. The Sponsor and the Trustee will enter into an Amended and Restated
Declaration of Trust satisfactory to each such party to provide for the
contemplated operation of the Trust created hereby and the issuance by the Trust
of the Capital Securities and Common Securities referred to therein. Prior to
the execution and delivery of such Amended and Restated Declaration of Trust (i)
the Trustee shall not have any duty or obligation hereunder or with respect to
the trust estate, except as otherwise required by applicable law, and (ii) the
Sponsor shall take or cause to be taken any action as may be necessary to obtain
prior to such execution and delivery any licenses, consents or approvals
required by applicable law or otherwise. Notwithstanding the foregoing, the
Trustee may take all actions which the Sponsor deems necessary, convenient or
incidental to effect the transactions contemplated herein. The Trustee shall not
have any duty or obligation under or in connection with this Declaration or any
document contemplated hereby, except as expressly provided by the terms of this
Declaration, and no implied duties or obligations shall be read into this
Declaration against the Trustee. The right of the Trustee to perform any
discretionary act enumerated herein shall not be construed as a duty.

      4. The Sponsor hereby agrees to (i) reimburse the Trustee for all
reasonable expenses (including reasonable fees and expenses of counsel and other
experts), (ii) indemnify, defend and hold harmless the Trustee and the officers,
directors, employees and agents of the Trustee (collectively, including the
Trustee in its individual capacity, the "Indemnified Persons") from and against
any and all losses, damages, liabilities, claims, actions, suits, costs,
expenses, disbursements (including the reasonable fees and expenses of counsel),
taxes and penalties of any kind and nature whatsoever (collectively,
"Expenses"), to the extent that such Expenses arise out of or are imposed upon
or asserted at any time against such Indemnified Persons with respect to


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the performance of this Declaration, the creation, operation, administration or
termination of the Trust, or the transactions contemplated hereby; provided,
however, that the Sponsor shall not be required to indemnify an Indemnified
Person for Expenses to the extent such Expenses result from the willful
misconduct, bad faith or gross negligence of such Indemnified Person, and (iii)
advance to each such Indemnified Person Expenses incurred by such Indemnified
Person in defending any claim, demand, action, suit or proceeding prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
by the Sponsor of an undertaking, by or on behalf of such Indemnified Person, to
repay such amount if it shall be determined that such Indemnified Person is not
entitled to be indemnified therefor under this Section 4. The obligations of the
Sponsor under this Section 4 shall survive the resignation or removal of the
Trustee, shall survive the termination, amendment, supplement, and/or
restatement of this Declaration, and shall survive the transfer by the Sponsor
of any or all of its interest in the Trust pursuant to Section 5 below or
otherwise.

      5. The Sponsor, as sponsor of the Trust, is hereby authorized, in its
discretion, (i) to prepare, execute and file on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents that shall be
necessary or desirable to register or establish the exemption from registration
of the Capital Securities of the Trust under the securities or "Blue Sky" laws
of such jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary
or desirable; (ii) to negotiate, execute, deliver and perform on behalf of the
Trust one or more placement agent agreements, dealer/manager agreements, escrow
agreements, subscription agreements and other similar or related agreements
providing for or relating to the sale and issuance of the Capital Securities of
the Trust and/or any other interests in the Trust; (iii) to prepare, execute and
deliver on behalf of the Trust any and all documents, certificates, papers,
instruments and other writings as it deems desirable in connection with any of
the foregoing; and (iv) to prepare, execute and deliver letters or documents to,
or instruments for filing with, a depository relating to the Capital Securities
of the Trust as it deems necessary or desirable.

      In the event that any filing referred to in this Section 5 is required by
the rules and regulations of the Securities and Exchange Commission (the
"Commission") or state securities or Blue Sky laws to be executed on behalf of
the Trust by a trustee, the Trustee, in its capacity as a trustee of the Trust,
so required to execute such filings is hereby authorized and, to the extent so
required, directed to join in any such filing and to execute on behalf of the
Trust any and all of the foregoing, it being understood that the Trustee, in its
capacity as a trustee of the Trust, shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required to do
so by the rules and regulations of the Commission or applicable state securities
or Blue Sky laws.

      6. The Trustee is authorized to take such action or refrain from taking
such action under this Declaration as it may be directed in writing by the
Sponsor from time to time; provided, however, that the Trustee shall not be
required to take or refrain from taking any such action if the Trustee shall
have determined, or shall have been advised by counsel, that such performance is
likely to involve the Trustee in personal liability or is contrary to the terms
of this Declaration or of any document contemplated hereby to which the Trust or
the Trustee is a party or is otherwise contrary to law. If at any time the
Trustee determines that it requires or desires guidance regarding the
application of any provision of this Declaration or any other document, or

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regarding compliance with any direction it received hereunder, then the Trustee
may deliver a notice to the Sponsor requesting written instructions as to the
course of action desired by the Sponsor, and such instructions shall constitute
full and complete authorization and protection for actions taken and other
performance by the Trustee in reliance thereon. Until the Trustee has received
such instructions after delivering such notice, it may refrain from taking any
action with respect to the matters described in such notice.

      7. This Declaration may be executed in two or more counterparts.

      8. The number of trustees of the Trust initially shall be one (1), and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Sponsor which may
increase or decrease the number of trustees of the Trust; provided, however, to
the extent required by the Business Trust Act, there shall at all times be one
trustee of the Trust that shall either be a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable Delaware law. Subject to the foregoing, the Sponsor
is entitled to appoint or remove without cause any trustee of the Trust at any
time. Any trustee of the Trust may resign upon thirty (30) days' prior notice to
the Sponsor.

      9. This Declaration shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws
principles).

                            [SIGNATURE PAGE FOLLOWS]



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      IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.

                                      Hawthorne Financial Corporation,
                                      as Sponsor


                                      By:
                                         ---------------------------------------
                                          Simone Lagomarsino
                                          President and Chief Executive Officer


                                      WILMINGTON TRUST COMPANY,
                                      as Trustee


                                      By:
                                         ---------------------------------------
                                          Name:
                                          Title: