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                                                                     EXHIBIT 4.3

                                TRUST AGREEMENT

          This TRUST AGREEMENT, dated as of November 3, 2000 (this "Trust
Agreement"), among Downey Financial Corp., a Delaware corporation (the
"Depositor"), (ii) Wilmington Trust Company a Delaware banking corporation, as
trustee (the "Delaware Trustee"), and (iii) Daniel D. Rosenthal, Thomas E.
Prince and Paul G. Woollatt, each an individual, as trustees (the
"Administrative Trustees" and, together with the Delaware Trustee, the
"Trustees"). The Depositor and the Trustees hereby agree as follows:

          1.   The trust created hereby (the "Trust") shall be known as "DOWNEY
FINANCIAL CAPITAL TRUST II" in which name the Trustees, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby, make
and execute contracts, and sue and be sued.

          2.   The Depositor hereby assigns, transfers, conveys and sets over to
the Trustees the sum of Ten Dollars ($10.00). The Trustees hereby acknowledge
receipt of such amount in trust from the Depositor, which amount shall
constitute the initial trust estate. The Trustees hereby declare that they will
hold the trust estate in trust for the Depositor. 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 document constitutes the governing
instrument of the Trust. The parties hereto hereby ratify the Trustees' filing
of a Certificate of Trust with the Delaware Secretary of State under the name
"DOWNEY FINANCIAL CAPITAL TRUST II."

          3.   The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Capital Securities and Common Securities referred
to therein. Prior to the execution and delivery of such amended and restated
Trust Agreement, the Trustees shall not have any duty or obligation hereunder or
with respect to the trust estate, except as otherwise required by applicable law
or as may be necessary to obtain prior to such execution and delivery any
licenses, consents or approvals required by applicable law or otherwise.

          4.   The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the registration
under the Securities Act of 1933, as amended, of the Capital Securities of the
Trust and possibly certain other securities and (b) if required, a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to the
registration of the Capital Securities of the Trust under the Securities
Exchange Act of 1934, as amended; (ii) to file with the New York Stock Exchange
or a national stock

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exchange (each, an "Exchange") and execute on behalf of the Trust one or more
listing applications and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Capital Securities to be listed on any of the Exchanges; (iii) to file and
execute on behalf of the Trust such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the Capital
Securities under the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; and (iv) to
execute on behalf of the Trust any underwriting agreement relating to the
Capital Securities, among the Trust, the Depositor and the underwriters named
therein. In the event that any filing referred to in clauses (i), (ii) and (iii)
above is required by the rules and regulations of the Commission, an Exchange or
state securities or blue sky laws to be executed on behalf of the Trust by one
or more of the Trustees, each of the Trustees, in such Trustee's capacity as a
trustee of the Trust, 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 Delaware 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 by
the rules and regulations of the Commission, the Exchange or state securities or
blue sky laws. In connection with the filings referred to above, the Depositor
and Daniel D. Rosenthal, Thomas E. Prince and Paul G. Woollatt, each as Trustees
and not in their individual capacities, hereby constitutes and appoints Daniel
D. Rosenthal and Thomas E. Prince, and each of them, as the Depositor's or such
Trustee's true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or such Trustee or in the
Depositor's or such Trustee's name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement (if required)
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Commission, the Exchange and administrators of
the state securities or blue sky laws, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully and to all
intents and purposes as the Depositor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their respective substitute or substitutes, shall do
or cause to be done by virtue hereof.

          5.   This Trust Agreement may be executed in one or more counterparts.

          6.   The number of Trustees initially shall be four (4) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or decrease
the number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee 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
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty (30) days' prior notice to the
Depositor.

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          7.   (a)  The Trustees and their officers, directors, agents and
servants (collectively, the "Fiduciary Indemnified Persons") shall not be
liable, responsible or accountable in damages or otherwise to the Trust, the
Depositor, the Trustees or any holder of the Trust Securities (the Trust, the
Depositor and any holder of the Trust Securities being a "Covered Person") for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by the Fiduciary Indemnified Persons in good faith on behalf of the
Trust and in a manner the Fiduciary Indemnified Persons reasonably believed to
be within the scope of authority conferred on the Fiduciary Indemnified Persons
by this Trust Agreement or by law, except that the Fiduciary Indemnified Persons
shall be liable for any such loss, damage or claim incurred by reason of the
Fiduciary Indemnified Person's negligence or willful misconduct with respect to
such acts or omissions.

          (b)  The Fiduciary Indemnified Persons shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any person as to
matters the Fiduciary Indemnified Persons reasonably believes are within such
other person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to holders of Trust Securities might properly be
paid.

          (c)  The Depositor agrees, to the fullest extent permitted by
applicable law, (i) to indemnify and hold harmless each Fiduciary Indemnified
Person from and against any loss, damage, liability, tax, penalty, expense or
claim of any kind or nature whatsoever incurred by the Fiduciary Indemnified
Persons by reason of the creation, operation or termination of the Trust in a
manner the Fiduciary Indemnified Persons reasonably believed to be within the
scope of authority conferred on the Fiduciary Indemnified Persons by this Trust
Agreement of Trust, except that no Fiduciary Indemnified Persons shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
the Fiduciary Indemnified Persons by reason of negligence or willful misconduct
with respect to such acts or omissions, and (ii) to advance expenses (including
legal fees) incurred by a Fiduciary Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, prior to the final
disposition of such claim, demand, action, suit or proceeding, upon receipt by
the Trust of an undertaking by or on behalf of such Fiduciary Indemnified
Persons to repay such amount if it shall be determined that such Fiduciary
Indemnified Person is not entitled to be indemnified as authorized in the
preceding subsection.

          (d)  The provisions of Section 7 shall survive the termination of this
Trust Agreement or the earlier resignation or removal of the Fiduciary
Indemnified Persons.

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

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

                                DOWNEY FINANCIAL CORP.
                                as Depositor

                                    By: /s/ Donald E. Royer
                                        -------------------
                                    Donald E. Royer
                                    Executive Vice President and General Counsel

                                WILMINGTON TRUST COMPANY
                                as Trustee

                                    By: /s/ Anita Dallago
                                        -----------------
                                        Name: Anita Dallago
                                        Title: Financial Services Officer

                                By: /s/ Daniel D. Rosenthal
                                    -----------------------
                                    Daniel D. Rosenthal, as Administrative
                                    Trustee


                                By: /s/ Thomas E. Prince
                                    --------------------
                                    Thomas E. Prince, as Administrative Trustee


                                By: /s/ Paul G. Woollatt
                                    --------------------
                                    Paul G. Woollatt, as Administrative Trustee

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