Document:

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                                                                    EXHIBIT 4.32

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                               GUARANTEE AGREEMENT

                                     BETWEEN

                        HAWTHORNE FINANCIAL CORPORATION,
                                  AS GUARANTOR,

                                       AND

                              THE BANK OF NEW YORK,
                              AS GUARANTEE TRUSTEE

                          DATED AS OF NOVEMBER 1, 2002

                              HFC CAPITAL TRUST IV

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         GUARANTEE AGREEMENT, dated as of November 1, 2002, executed and
delivered by Hawthorne Financial Corporation, a Delaware corporation (the
"Guarantor") having its principal office at 2381 Rosecrans Avenue, El Segundo,
California 90245, and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (in such capacity, the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of HFC Capital Trust IV, a Delaware statutory trust (the
"Issuer").

                              W I T N E S S E T H :

         WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of the date hereof (the "Trust Agreement"), among the Guarantor, as Depositor,
the Property Trustee, the Delaware Trustee and the Administrative Trustees named
therein and the holders from time to time of the Preferred Securities (as
hereinafter defined), the Issuer is issuing $15,000,000 aggregate Liquidation
Amount (as defined in the Trust Agreement) of its Floating Rate Preferred
Securities (Liquidation Amount $1,000 per preferred security) (the "Preferred
Securities") representing preferred undivided beneficial interests in the assets
of the Issuer and having the terms set forth in the Trust Agreement;

         WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Notes (as
defined in the Trust Agreement) of the Guarantor; and

         WHEREAS, as incentive for the Holders to purchase Preferred Securities
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Preferred Securities:

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                                   ARTICLE I

                         INTERPRETATION AND DEFINITIONS

         SECTION 1.1.      INTERPRETATION.

         In this Guarantee Agreement, unless the context otherwise requires:

                  (a)      capitalized terms used in this Guarantee Agreement
         but not defined in the preamble hereto have the respective meanings
         assigned to them in Section 1.2;

                  (b)      the words "include", "includes" and "including" shall
         be deemed to be followed by the phrase "without limitation";

                  (c)      all references to "the Guarantee Agreement" or "this
         Guarantee Agreement" are to this Guarantee Agreement as modified,
         supplemented or amended from time to time;

                  (d)      all references in this Guarantee Agreement to
         Articles and Sections are to Articles and Sections of this Guarantee
         Agreement unless otherwise specified;

                  (e)      the words "hereby", "herein", "hereof" and
         "hereunder" and other words of similar import refer to this Guarantee
         Agreement as a whole and not to any particular Article, Section or
         other subdivision;

                  (f)      a reference to the singular includes the plural and
         vice versa; and

                  (g)      the masculine, feminine or neuter genders used herein
         shall include the masculine, feminine and neuter genders.

         SECTION 1.2.      DEFINITIONS.

         As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:

                  "Affiliate" of any specified Person means any other Person
         directly or indirectly controlling or controlled by or under direct or
         indirect common control with such specified Person; provided, that the
         Issuer shall not be deemed to be an Affiliate of the Guarantor. For the
         purposes of this definition, "control" when used with respect to any
         specified Person means the power to direct the management and policies
         of such Person, directly or indirectly, whether through the ownership
         of voting securities, by contract or otherwise; and the terms
         "controlling" and "controlled" have meanings correlative to the
         foregoing.

                  "Beneficiaries" means any Person to whom the Issuer is or
         hereafter becomes indebted or liable.

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                  "Board of Directors" means either the board of directors of
         the Guarantor or any duly authorized committee of that board.

                  "Common Securities" means the securities representing common
         undivided beneficial interests in the assets of the Issuer.

                  "Debt" means with respect to any Person, whether recourse is
         to all or a portion of the assets of such Person, whether currently
         existing or hereafter incurred, and whether or not contingent and
         without duplication, (i) every obligation of such Person for money
         borrowed; (ii) every obligation of such Person evidenced by bonds,
         debentures, notes or other similar instruments, including obligations
         incurred in connection with the acquisition of property, assets or
         businesses; (iii) every reimbursement obligation of such Person with
         respect to letters of credit, bankers' acceptances or similar
         facilities issued for the account of such Person; (iv) every obligation
         of such Person issued or assumed as the deferred purchase price of
         property or services (but excluding trade accounts payable arising in
         the ordinary course of business); (v) every capital lease obligation of
         such Person; (vi) all indebtedness of such Person, whether incurred on
         or prior to the date of this Guarantee Agreement or thereafter
         incurred, for claims in respect of derivative products, including
         interest rate, foreign exchange rate and commodity forward contracts,
         options, swaps and similar arrangements; (vii) every obligation of the
         type referred to in clauses (i) through (vi) of another Person and all
         dividends of another Person the payment of which, in either case, such
         Person has guaranteed or is responsible or liable for, directly or
         indirectly, as obligor or otherwise; and (viii) any renewals,
         extensions, refundings, amendments or modifications of any obligation
         of the type referred to in clauses (i) through (vii).

                  "Event of Default" means a default by the Guarantor on any of
         its payment or other obligations under this Guarantee Agreement;
         provided, that except with respect to a default in payment of any
         Guarantee Payments, the Guarantor shall have received notice of default
         from the Guarantee Trustee and shall not have cured such default within
         thirty (30) days after receipt of such notice.

                  "Guarantee Payments" means the following payments or
         distributions, without duplication, with respect to the Preferred
         Securities, to the extent not paid or made by or on behalf of the
         Issuer: (i) any accumulated and unpaid Distributions (as defined in the
         Trust Agreement) required to be paid on the Preferred Securities, to
         the extent the Issuer shall have funds on hand available therefor at
         such time, (ii) the Redemption Price with respect to any Preferred
         Securities to the extent the Issuer shall have funds on hand available
         therefor at such time, and (iii) upon a voluntary or involuntary
         termination, winding up or liquidation of the Issuer, unless Notes are
         distributed to the Holders, the lesser of (a) the aggregate of the
         Liquidation Amount of $1,000 per Preferred Security plus accumulated
         and unpaid Distributions on the Preferred Securities to the date of
         payment, to the extent that the Issuer shall have funds available
         therefor at such time and (b) the amount of assets of the Issuer
         remaining available for distribution to Holders in liquidation of the
         Issuer after satisfaction of liabilities to creditors of the Issuer in
         accordance with applicable law (in either case, the "Liquidation
         Distribution").

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                  "Guarantee Trustee" means The Bank of New York, until a
         Successor Guarantee Trustee, as defined below, has been appointed and
         has accepted such appointment pursuant to the terms of this Guarantee
         Agreement, and thereafter means each such Successor Guarantee Trustee.

                  "Holder" means any holder, as registered on the books and
         records of the Issuer, of any Preferred Securities; provided, that, in
         determining whether the holders of the requisite percentage of
         Preferred Securities have given any request, notice, consent or waiver
         hereunder, "Holder" shall not include the Guarantor, the Guarantee
         Trustee or any Affiliate of the Guarantor or the Guarantee Trustee.

                  "Indenture" means the Junior Subordinated Indenture, dated as
         of the date hereof, as supplemented and amended, between the Guarantor
         and The Bank of New York, as trustee.

                  "List of Holders" has the meaning specified in Section 2.1.

                  "Majority in Liquidation Amount of the Preferred Securities"
         means a vote by the Holder(s), voting separately as a class, of more
         than fifty percent (50%) of the aggregate Liquidation Amount of all
         then outstanding Preferred Securities issued by the Issuer.

                  "Obligations" means any costs, expenses or liabilities (but
         not including liabilities related to taxes) of the Issuer, other than
         obligations of the Issuer to pay to holders of any Trust Securities the
         amounts due such holders pursuant to the terms of the Trust Securities.

                  "Officers' Certificate" means, with respect to any Person, a
         certificate signed by the Chief Executive Officer, Chief Financial
         Officer, President or a Vice President of such Person, and by the
         Treasurer, an Assistant Treasurer, the Secretary or an Assistant
         Secretary of such Person, and delivered to the Guarantee Trustee. Any
         Officers' Certificate delivered with respect to compliance with a
         condition or covenant provided for in this Guarantee Agreement (other
         than the certificate provided pursuant to Section 2.4) shall include:

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                  (a)      a statement that each officer signing the Officers'
         Certificate has read the covenant or condition and the definitions
         relating thereto;

                  (b)      a brief statement of the nature and scope of the
         examination or investigation undertaken by each officer in rendering
         the Officers' Certificate;

                  (c)      a statement that each officer has made such
         examination or investigation as, in such officer's opinion, is
         necessary to enable such officer to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (d)      a statement as to whether, in the opinion of each
         officer, such condition or covenant has been complied with.

                  "Person" means a legal person, including any individual,
         corporation, estate, partnership, joint venture, association, joint
         stock company, limited liability company, trust, unincorporated
         association, government or any agency or political subdivision thereof
         or any other entity of whatever nature.

                  "Responsible Officer" means, with respect to the Guarantee
         Trustee, any Senior Vice President, any Vice President, any Assistant
         Vice President, the Secretary, any Assistant Secretary, the Treasurer,
         any Assistant Treasurer, any Trust Officer or Assistant Trust Officer
         or any other officer of the Corporate Trust Department of the Guarantee
         Trustee and also means, with respect to a particular corporate trust
         matter, any other officer to whom such matter is referred because of
         that officer's knowledge of and familiarity with the particular
         subject.

                  "Senior Debt" means the principal of and any premium and
         interest on (including interest accruing on or after the filing of any
         petition in bankruptcy or for reorganization relating to the Guarantor
         whether or not such claim for post-petition interest is allowed in such
         proceeding) all Debt of the Guarantor, whether incurred on or prior to
         the date of the Indenture or thereafter incurred, unless it is provided
         in the instrument creating or evidencing the same or pursuant to which
         the same is outstanding, that such obligations are not superior in
         right of payment to the Preferred Securities; provided, however, that
         if the Guarantor is subject to the regulation and supervision of an
         "appropriate Federal banking agency" within the meaning of 12 U.S.C.
         1813(q), the Guarantor shall have received the approval of such
         appropriate Federal banking agency prior to issuing any such
         obligation; provided further, that Senior Debt shall not include any
         other debt securities, and guarantees in respect of such debt
         securities, issued to any trust other than the Issuer (or a trustee of
         such trust), partnership or other entity affiliated with the Guarantor
         that is a financing vehicle of the Guarantor (a "financing entity"), in
         connection with the issuance by such financing entity of equity
         securities or other securities that are treated as equity capital for
         regulatory capital purposes guaranteed by the Guarantor pursuant to an
         instrument that ranks pari passu with or junior in right of payment to
         this Guarantee Agreement, including, without limitation, securities
         issued by HFC Capital Trust I, HFC Capital Trust II and HFC Capital
         Trust III.

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                  "Successor Guarantee Trustee" means a successor Guarantee
         Trustee possessing the qualifications to act as Guarantee Trustee under
         Section 4.1.

                  "Trust Indenture Act" means the Trust Indenture Act of 1939,
         as amended and as in effect on the date of this Guarantee Agreement.

Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.

                                   ARTICLE II

                                     REPORTS

         SECTION 2.1.      LIST OF HOLDERS.

         The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee at such times as the Guarantee Trustee may request in writing, within
thirty (30) days after the receipt by the Guarantor of any such request, a list,
in such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders (the "List of Holders") as of a date not more than
fifteen (15) days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.

         SECTION 2.2.      PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.

         The Guarantor shall deliver to the Guarantee Trustee, within one
hundred and twenty (120) days after the end of each fiscal year of the Guarantor
ending after the date of this Guarantee Agreement, an Officers' Certificate
covering the preceding fiscal year, stating whether or not to the knowledge of
the signers thereof the Guarantor is in default in the performance or observance
of any of the terms or provisions or any of the conditions of this Guarantee
Agreement (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Guarantor shall be in default thereof,
specifying all such defaults and the nature and status thereof of which they
have knowledge.

         SECTION 2.3.      EVENT OF DEFAULT; WAIVER.

         The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent therefrom.

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         SECTION 2.4.      EVENT OF DEFAULT; NOTICE.

         (a)      The Guarantee Trustee shall, within ninety (90) days after the
occurrence of a default, transmit to the Holders notices of all defaults
actually known to the Guarantee Trustee, unless such defaults have been cured or
waived before the giving of such notice, provided, that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders. For the purpose of this
Section 2.4, the term "default" means any event that is, or after notice or
lapse of time or both would become, an Event of Default.

         (b)      The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of Default
from the Guarantor or a Holder.

                                  ARTICLE III

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

         SECTION 3.1.      POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.

         (a)      This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising its
rights pursuant to Section 5.4(d) or to a Successor Guarantee Trustee upon
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

         (b)      The rights, immunities, duties and responsibilities of the
Guarantee Trustee shall be as provided by this Guarantee Agreement and there
shall be no other duties or obligations, express or implied, of the Guarantee
Trustee. Notwithstanding the foregoing, no provisions of this Guarantee
Agreement shall require the Guarantee Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not herein expressly so provided, every provision of this Guarantee
Agreement relating to the conduct or affecting the liability of or affording
protection to the Guarantee Trustee shall be subject to the provisions of this
Section 3.1. To the extent that, at law or in equity, the Guarantee Trustee has
duties and liabilities relating to the Guarantor or the Holders, the Guarantee
Trustee shall not be liable to any Holder for the Guarantee Trustee's good faith
reliance on the provisions of this Guarantee Agreement. The provisions of this

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Guarantee Agreement, to the extent that they restrict the duties and liabilities
of the Guarantee Trustee otherwise existing at law or in equity, are agreed by
the Guarantor and the Holders to replace such other duties and liabilities of
the Guarantee Trustee.

         (c)      No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action,
negligent failure to act or own willful misconduct, except that:

                  (i)      the Guarantee Trustee shall not be liable for any
         error of judgment made in good faith by a Responsible Officer of the
         Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
         was negligent in ascertaining the pertinent facts upon which such
         judgment was made; and

                  (ii)     the Guarantee Trustee shall not be liable with
         respect to any action taken or omitted to be taken by it in good faith
         in accordance with the direction of the Holders of not less than a
         Majority in Liquidation Amount of the Preferred Securities relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Guarantee Trustee, or exercising any trust or power
         conferred upon the Guarantee Trustee under this Guarantee Agreement.

         SECTION 3.2.      CERTAIN RIGHTS OF THE GUARANTEE TRUSTEE.

         (a)      Subject to the provisions of Section 3.1:

                  (i)      the Guarantee Trustee may conclusively rely and shall
         be fully protected in acting or refraining from acting in good faith
         and in accordance with the terms hereof upon any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document reasonably believed by it to be
         genuine and to have been signed, sent or presented by the proper party
         or parties;

                  (ii)     any direction or act of the Guarantor contemplated by
         this Guarantee Agreement shall be sufficiently evidenced by an
         Officers' Certificate unless otherwise prescribed herein;

                  (iii)    the Guarantee Trustee may consult with counsel, and
         the advice of such counsel shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted to be
         taken by it hereunder in good faith and in reliance thereon and in
         accordance with such advice. Such counsel may be counsel to the
         Guarantee Trustee, the Guarantor or any of its Affiliates and may be
         one of its employees. The Guarantee Trustee shall have the right at any
         time to seek instructions concerning the administration of this
         Guarantee Agreement from any court of competent jurisdiction;

                  (iv)     the Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee
         Agreement at the request or direction of any Holder, unless such Holder
         shall have provided to the Guarantee Trustee reasonable security or
         indemnity against the costs, expenses (including reasonable attorneys'
         fees

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         and expenses) and liabilities that might be incurred by it in complying
         with such request or direction, including such reasonable advances as
         may be requested by the Guarantee Trustee; provided, that, nothing
         contained in this Section 3.2(a)(iv) shall be taken to relieve the
         Guarantee Trustee, upon the occurrence of an Event of Default, of its
         obligation to exercise the rights and powers vested in it by this
         Guarantee Agreement;

                  (v)      the Guarantee Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Guarantee Trustee, in
         its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit, and if the Guarantee Trustee
         shall determine to make such inquiry or investigation, it shall be
         entitled to examine the books, records and premises of the Guarantor,
         personally or by agent or attorney;

                  (vi)     the Guarantee Trustee may execute any of the trusts
         or powers hereunder or perform any duties hereunder either directly or
         by or through its agents, attorneys, custodians or nominees and the
         Guarantee Trustee shall not be responsible for any misconduct or
         negligence on the part of any such agent, attorney, custodian or
         nominee appointed with due care by it hereunder;

                  (vii)    whenever in the administration of this Guarantee
         Agreement the Guarantee Trustee shall deem it desirable to receive
         instructions with respect to enforcing any remedy or right hereunder,
         the Guarantee Trustee (A) may request instructions from the Holders of
         a Majority in Liquidation Amount of the Preferred Securities, (B) may
         refrain from enforcing such remedy or right or taking such other action
         until such instructions are received and (C) shall be protected in
         acting in accordance with such instructions;

                  (viii)   except as otherwise expressly provided by this
         Guarantee Agreement, the Guarantee Trustee shall not be under any
         obligation to take any action that is discretionary under the
         provisions of this Guarantee Agreement; and

                  (ix)     whenever, in the administration of this Guarantee
         Agreement, the Guarantee Trustee shall deem it desirable that a matter
         be proved or established before taking, suffering or omitting to take
         any action hereunder, the Guarantee Trustee (unless other evidence is
         herein specifically prescribed) may, in the absence of bad faith on its
         part, request and rely upon an Officers' Certificate which, upon
         receipt of such request from the Guarantee Trustee, shall be promptly
         delivered by the Guarantor.

         (b)      No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

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         SECTION 3.3.      COMPENSATION.

         The Guarantor agrees to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provisions of law in regard to the
compensation of a trustee of an express trust) and to reimburse the Guarantee
Trustee upon request for all reasonable expenses, disbursements and advances
(including the reasonable fees and expenses of its attorneys and agents)
incurred or made by the Guarantee Trustee in accordance with any provisions of
this Guarantee Agreement.

         SECTION 3.4.      INDEMNITY.

         The Guarantor agrees to indemnify and hold harmless the Guarantee
Trustee and any of its Affiliates and any of their officers, directors,
shareholders, employees, representatives or agents from and against any loss,
damage, liability, tax (other than income, franchise or other taxes imposed on
amounts paid pursuant to Section 3.3), penalty, expense or claim of any kind or
nature whatsoever incurred without negligence, bad faith or willful misconduct
on its part, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a result
of any amount due to it under this Guarantee Agreement. This indemnity shall
survive the termination of this Agreement or the resignation or removal of the
Guarantee Trustee.

         In no event shall the Guarantee Trustee be liable for any indirect,
special, punitive or consequential loss or damage of any kind whatsoever,
including, but not limited to, lost profits, even if the Guarantee Trustee has
been advised of the likelihood of such loss or damage and regardless of the form
of action.

         In no event shall the Guarantee Trustee be liable for any failure or
delay in the performance of its obligations hereunder because of circumstances
beyond its control, including, but not limited to, acts of God, flood, war
(declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Guarantee Agreement.

         SECTION 3.5.      SECURITIES.

         The Guarantee Trustee or any other agent of the Guarantee Trustee, in
its individual or any other capacity, may become the owner or pledgee of Common
or Preferred Securities.

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                                   ARTICLE IV

                                GUARANTEE TRUSTEE

         SECTION 4.1.      GUARANTEE TRUSTEE; ELIGIBILITY.

         (a)      There shall at all times be a Guarantee Trustee which shall:

                  (i)      not be an Affiliate of the Guarantor; and

                  (ii)     be a corporation organized and doing business under
         the laws of the United States or of any State thereof, authorized to
         exercise corporate trust powers, having a combined capital and surplus
         of at least fifty million dollars ($50,000,000), subject to supervision
         or examination by Federal or State authority and having an office
         within the United States. If such corporation publishes reports of
         condition at least annually, pursuant to law or to the requirements of
         such supervising or examining authority, then, for the purposes of this
         Section 4.1, the combined capital and surplus of such corporation shall
         be deemed to be its combined capital and surplus as set forth in its
         most recent report of condition so published.

         (b)      If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2(c).

         (c)      If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee shall either eliminate such interest or resign in the manner
and with the effect set out in Section 4.2(c).

         SECTION 4.2.      APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
                           TRUSTEE.

         (a)      Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor, except during
an Event of Default.

         (b)      The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.

         (c)      The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

         (d)      If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within thirty (30) days
after delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of

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the Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.

                                   ARTICLE V

                                   GUARANTEE

         SECTION 5.1.      GUARANTEE.

         (a)      The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer), as and when due, regardless of
any defense (except for the defense of payment by the Issuer), right of set-off
or counterclaim which the Issuer may have or assert. The Guarantor's obligation
to make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders. The Guarantor shall give prompt written notice to the
Guarantee Trustee in the event it makes any direct payment to the Holders
hereunder.

         (b)      The Guarantor hereby also agrees to assume any and all
Obligations of the Issuer, and, in the event any such Obligation is not so
assumed, subject to the terms and conditions hereof, the Guarantor hereby
irrevocably and unconditionally guarantees to each Beneficiary the full payment,
when and as due, of any and all Obligations to such Beneficiaries. This
Guarantee is intended to be for the Beneficiaries who have received notice
hereof.

         SECTION 5.2.      WAIVER OF NOTICE AND DEMAND.

         The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.

         SECTION 5.3.      OBLIGATIONS NOT AFFECTED.

         The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:

                  (a)      the release or waiver, by operation of law or
         otherwise, of the performance or observance by the Issuer of any
         express or implied agreement, covenant, term or condition relating to
         the Preferred Securities to be performed or observed by the Issuer;

                  (b)      the extension of time for the payment by the Issuer
         of all or any portion of the Distributions (other than an extension of
         time for payment of Distributions that results from the extension of
         any interest payment period on the Notes as provided in the Indenture),
         Redemption Price, Liquidation Distribution or any other sums payable
         under

                                       12

<PAGE>

         the terms of the Preferred Securities or the extension of time for the
         performance of any other obligation under, arising out of, or in
         connection with, the Preferred Securities;

                  (c)      any failure, omission, delay or lack of diligence on
         the part of the Holders to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Holders pursuant to the
         terms of the Preferred Securities, or any action on the part of the
         Issuer granting indulgence or extension of any kind;

                  (d)      the voluntary or involuntary liquidation,
         dissolution, sale of any collateral, receivership, insolvency,
         bankruptcy, assignment for the benefit of creditors, reorganization,
         arrangement, composition or readjustment of debt of, or other similar
         proceedings affecting, the Issuer or any of the assets of the Issuer;

                  (e)      any invalidity of, or defect or deficiency in, the
         Preferred Securities;

                  (f)      the settlement or compromise of any obligation
         guaranteed hereby or hereby incurred; or

                  (g)      any other circumstance whatsoever that might
         otherwise constitute a legal or equitable discharge or defense of a
         guarantor, it being the intent of this Section 5.3 that the obligations
         of the Guarantor hereunder shall be absolute and unconditional under
         any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

         SECTION 5.4.      RIGHTS OF HOLDERS.

         The Guarantor expressly acknowledges that: (a) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (b) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (c) the Holders of a Majority in Liquidation
Amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement; and (d) any
Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Guarantee Trustee, the Issuer or any other Person.

         SECTION 5.5.      GUARANTEE OF PAYMENT.

         This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Notes to Holders as provided in the Trust
Agreement.

                                       13

<PAGE>

         SECTION 5.6.      SUBROGATION.

         The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, that, the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights it may acquire by way of subrogation
or any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such payment, any
amounts are due and unpaid under this Guarantee Agreement. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

         SECTION 5.7.      INDEPENDENT OBLIGATIONS.

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3.

         SECTION 5.8.      ENFORCEMENT.

         A Beneficiary may enforce the Obligations of the Guarantor contained in
Section 5.1(b) directly against the Guarantor, and the Guarantor waives any
right or remedy to require that any action be brought against the Issuer or any
other person or entity before proceeding against the Guarantor.

                                   ARTICLE VI

                           COVENANTS AND SUBORDINATION

         SECTION 6.1.      DIVIDENDS, DISTRIBUTIONS AND PAYMENTS.

         So long as any Preferred Securities remain outstanding, if there shall
have occurred and be continuing an Event of Default or the Guarantor shall have
entered into an Extension Period as provided for in the Indenture and such
period, or any extension thereof, shall have commenced and be continuing, then
the Guarantor may not (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make liquidation payment with respect to, any of
the Guarantor's capital stock or (b) make any payment of principal of or any
interest or premium on or repay, repurchase or redeem any debt securities of the
Guarantor that rank pari passu in all respects with or junior in interest to the
Preferred Securities (other than (i) repurchases, redemptions or other
acquisitions of shares of capital stock of the Guarantor in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one of more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock)

                                       14

<PAGE>

as consideration in an acquisition transaction entered into prior to the
occurrence of such Event of Default or the applicable Extension Period, (ii) as
a result of an exchange or conversion of any class or series of the Guarantor's
capital stock (or any capital stock of a subsidiary of the Guarantor) for any
class or series of the Guarantor's capital stock or any class of series of the
Guarantor's indebtedness for any class or series of the Guarantor's capital
stock, (iii) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversions or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) any declaration of a
dividend in connection with any rights plan, the issuance of rights, stock or
other property under any rights plan or the redemption or repurchase of rights
pursuant thereto, or (v) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).

         SECTION 6.2.      SUBORDINATION.

         The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor.

         SECTION 6.3.      PARI PASSU GUARANTEES.

         (a)      The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with the obligations of the Guarantor under any
similar guarantee agreements issued by the Guarantor with respect to preferred
securities (if any) similar to the Preferred Securities, issued by trusts other
than the Issuer established or to be established by the Guarantor (if any), in
each case similar to the Issuer, including, without limitation, the Guarantee
Agreement, dated March 28, 2001, issued by the Guarantor with respect to the
preferred securities issued by HFC Capital Trust I, the Guarantee Agreement,
dated November 28, 2001, issued by the Guarantor with respect to the preferred
securities issued by HFC Capital Trust II and the Guarantee Agreement, dated
April 10, 2002, issued by the Guarantor with respect to the preferred securities
issued by HFC Capital Trust III.

         (b)      The right of the Guarantor to participate in any distribution
of assets of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Debt of the Guarantor, under any indenture or
agreement that the Guarantor may enter into in the future or otherwise.

                                       15

<PAGE>

                                  ARTICLE VII

                                  TERMINATION

         SECTION 7.1.      TERMINATION.

         This Guarantee Agreement shall terminate and be of no further force and
effect upon (a) full payment of the Redemption Price of all Preferred
Securities, (b) the distribution of Notes to the Holders in exchange for all of
the Preferred Securities or (c) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement. The obligations of the Guarantor under Sections 3.3
and 3.4 shall survive any such termination or the resignation and removal of the
Guarantee Trustee.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         SECTION 8.1.      SUCCESSORS AND ASSIGNS.

         All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its rights or delegate its obligations hereunder without the prior approval of
the Holders of a Majority in Liquidation Amount of the Preferred Securities.

         SECTION 8.2.      AMENDMENTS.

         Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Guarantor, the Guarantee Trustee and the Holders of not
less than a Majority in Liquidation Amount of the Preferred Securities. The
provisions of Article VI of the Trust Agreement concerning meetings or consents
of the Holders shall apply to the giving of such approval.

         SECTION 8.3.      NOTICES.

         Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

                                       16

<PAGE>

                  (a)      if given to the Guarantor, to the address or
         facsimile number set forth below or such other address, facsimile
         number or to the attention of such other Person as the Guarantor may
         give notice to the Guarantee Trustee and the Holders:

                           Hawthorne Financial Corporation
                           2381 Rosecrans Avenue
                           El Segundo, California 90245
                           Facsimile No.: (310) 725-5034
                           Attention: Eileen Lyon

                  (b)      if given to the Issuer, at the Issuer's address or
         facsimile number set forth below or such other address, facsimile
         number or to the attention of such other Person as the Issuer may give
         notice to the Guarantee Trustee and the Holders:

                           HFC Capital Trust IV
                           c/o Hawthorne Financial Corporation
                           2381 Rosecrans Avenue
                           El Segundo, California 90245
                           Facsimile No.: (310) 725-5034
                           Attention: Eileen Lyon

                  (c)      if given to the Guarantee Trustee, at the address or
         facsimile number set forth below or such other address, facsimile
         number or to the attention of such other Person as the Guarantee
         Trustee may give notice to the Guarantor and the Holders:

                           The Bank of New York
                           101 Barclay Street
                           New York, New York 10286
                           Facsimile No.: (212) 896-7299
                           Attention: Corporate Trust Administration

                  (d)      if given to any Holder, at the address set forth on
         the books and records of the Issuer.

         All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

         SECTION 8.4.      BENEFIT.

         This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Preferred Securities.

                                       17

<PAGE>

         SECTION 8.5.      GOVERNING LAW.

         THIS GUARANTEE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH PARTY
HERETO, SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

         SECTION 8.6.      SUBMISSION TO JURISDICTION.

         ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE BROUGHT IN OR
REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW
YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK
(IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF
THIS GUARANTEE AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS GUARANTEE AGREEMENT.

         SECTION 8.7.      COUNTERPARTS.

         This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                      [THE NEXT PAGE IS THE SIGNATURE PAGE]

                                       18

<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Guarantee
Agreement as of the date first above written.

                                        [COMPANY]

                                        By: __________________________________
                                            Name
                                            Title:

                                        THE BANK OF NEW YORK, not in its
                                        individual capacity, but solely as
                                        Guarantee Trustee

                                        By: __________________________________
                                            Name
                                            Title:

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                        <C>
ARTICLE I           INTERPRETATION AND DEFINITIONS.......................   2
         Section 1.1.     Interpretation.................................   2
         Section 1.2.     Definitions....................................   2

ARTICLE II          REPORTS..............................................   6
         Section 2.1.     List of Holders................................   6
         Section 2.2.     Periodic Reports to the Guarantee Trustee......   6
         Section 2.3.     Event of Default; Waiver.......................   6
         Section 2.4.     Event of Default; Notice.......................   7

ARTICLE III         POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE...   7
         Section 3.1.     Powers and Duties of the Guarantee Trustee.....   7
         Section 3.2.     Certain Rights of the Guarantee Trustee........   8
         Section 3.3.     Compensation...................................  10
         Section 3.4.     Indemnity......................................  10
         Section 3.5.     Securities.....................................  10

ARTICLE IV          GUARANTEE TRUSTEE....................................  11
         Section 4.1.     Guarantee Trustee; Eligibility.................  11
         Section 4.2.     Appointment, Removal and Resignation of the
                          Guarantee Trustee..............................  11

ARTICLE V           GUARANTEE............................................  12
         Section 5.1.     Guarantee......................................  12
         Section 5.2.     Waiver of Notice and Demand....................  12
         Section 5.3.     Obligations Not Affected.......................  12
         Section 5.4.     Rights of Holders..............................  13
         Section 5.5.     Guarantee of Payment...........................  13
         Section 5.6.     Subrogation....................................  14
         Section 5.7.     Independent Obligations........................  14
         Section 5.8.     Enforcement....................................  14

ARTICLE VI          COVENANTS AND SUBORDINATION..........................  14
         Section 6.1.     Dividends, Distributions and Payments..........  14
         Section 6.2.     Subordination..................................  15
         Section 6.3.     Pari Passu Guarantees..........................  15

ARTICLE VII         TERMINATION..........................................  16
         Section 7.1.     Termination....................................  16

ARTICLE VIII        MISCELLANEOUS........................................  16
         Section 8.1.     Successors and Assigns.........................  16
         Section 8.2.     Amendments.....................................  16
         Section 8.3.     Notices........................................  16
         Section 8.4.     Benefit........................................  17
         Section 8.5.     Governing Law..................................  18
</TABLE>

                                        i

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<S>                                                                        <C>
         Section 8.6.     Submission to Jurisdiction.....................  18
         Section 8.7.     Counterparts...................................  18

</TABLE>

                                       ii<PAGE>
                                                                    EXHIBIT 4.33

               FLOATING RATE JUNIOR SUBORDINATED NOTE DUE 2032

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND SUCH SECURITIES, AND ANY INTEREST THEREIN,
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A UNDER THE SECURITIES ACT.

      THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR
THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR
OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, (II) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (V) PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF (III) OR
(V), SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF COUNSEL AND
OTHER INFORMATION SATISFACTORY TO IT AND (B) THE HOLDER WILL NOTIFY ANY
PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE.

      THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. ANY ATTEMPTED TRANSFER
OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE PRINCIPAL
AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF

<PAGE>

PRINCIPAL OF OR INTEREST ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
SECURITIES.

      THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE
HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN
EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR
ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE
EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY, OR ANY INTEREST THEREIN,
IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH
RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES
OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (II) SUCH PURCHASE WILL NOT
RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

      THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES
OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC").

<PAGE>

                 Floating Rate Junior Subordinated Note Due 2032

                                       of

                         Hawthorne Financial Corporation

No. 001                                                              $15,464,000

      Hawthorne Financial Corporation, a corporation organized and existing
under the laws of Delaware (hereinafter called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to The Bank of New York, not in its
individual capacity, but solely as Property Trustee for HFC Capital Trust IV, a
Delaware statutory trust (the "Holder"), or registered assigns, the principal
sum of FIFTEEN MILLION FOUR HUNDRED SIXTY-FOUR THOUSAND ($15,464,000) DOLLARS on
November 15, 2032. The Company further promises to pay interest on said
principal sum from November 1, 2002, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually
(subject to deferral as set forth herein) in arrears on May 15th and November
15th of each year, commencing May 15, 2003, or if any such day is not a Business
Day, on the next succeeding Business Day (and no interest shall accrue in
respect of the amounts whose payment is so delayed for the period from and after
such Interest Payment Date until such next succeeding Business Day), except
that, if such Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case,
with the same force and effect as if made on the Interest Payment Date, at the
rate equal to LIBOR plus 3.35% per annum, provided, that, the applicable
interest rate shall not exceed 12.0% through the Interest Payment Date in
November, 2007, together with Additional Tax Sums, if any, as provided in
Section 10.5 of the Indenture, until the principal hereof is paid or duly
provided for or made available for payment; provided, further, that any overdue
principal, premium or Additional Tax Sums and any overdue installment of
interest shall bear Additional Interest at the rate equal to LIBOR plus 3.35%
per annum (provided, that, the applicable interest rate on such overdue
principal, premium or Additional Tax Sums and any overdue installment of
interest shall not exceed 12.0% through the Interest Payment Date in November,
2007) (to the extent that the payment of such interest shall be legally
enforceable), compounded semi-annually, from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand.

      The amount of interest payable shall be computed on the basis of a 360-day
year and the actual number of days elapsed in the relevant interest period. The
amount of interest payable for any full interest period shall be computed by
dividing the applicable rate per annum by two. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date shall, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest installment. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of

<PAGE>

business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than ten (10) days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.

      So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of this
Security, to defer the payment of interest on this Security for a period of up
to ten (10) consecutive semi-annual interest payment periods (each such period,
an "Extension Period"), during which Extension Period(s), no interest shall be
due and payable (except any Additional Tax Sums that may be due and payable). No
Extension Period shall end on a date other than an Interest Payment Date, and no
Extension Period shall extend beyond the Stated Maturity of the principal of
this Security. No interest shall be due and payable during an Extension Period
(except any Additional Tax Sums that may be due and payable), except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension Period shall bear Additional Interest (to the
extent payment of such interest would be legally enforceable) at the rate equal
to LIBOR plus 3.35% per annum (provided, that, the applicable interest rate
shall not exceed 12.0% through the Interest Payment Date in November, 2007),
compounded semiannually, from the dates on which amounts would have otherwise
been due and payable until paid or made available for payment. At the end of any
such Extension Period, the Company shall pay all interest then accrued and
unpaid on this Security, together with such Additional Interest. Prior to the
termination of any such Extension Period, the Company may further defer the
payment of interest; provided, that (i) all such previous and further extensions
comprising such Extension Period do not exceed ten (10) semi-annual interest
payment periods, (ii) no Extension Period shall end on a date other than an
Interest Payment Date and (iii) no Extension Period shall extend beyond the
Stated Maturity of the principal of this Security. Upon the termination of any
such Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due on any Interest Payment Date, the Company
may elect to begin a new Extension Period; provided, that (i) such Extension
Period does not exceed ten (10) semi-annual interest payment periods, (ii) no
Extension Period shall end on a date other than an Interest Payment Date and
(iii) no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security. The Company shall give the Holder of this Security
and the Trustee written notice of its election to begin any such Extension
Period at least one Business Day prior to the next succeeding Interest Payment
Date on which interest on this Security would be payable but for such deferral
or, so long as this Security is held by the Trust, at least one Business Day
prior to the earlier of (i) the next succeeding date on which Distributions on
the Preferred Securities of HFC Capital Trust IV would be payable but for such
deferral and (ii) the date on which the Property Trustee of such Trust is
required to give notice to any securities exchange or other applicable
self-regulatory organization or to holders of such Preferred Securities of the
record date for the payment of such Distributions.

<PAGE>

      During any such Extension Period, the Company shall not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or (ii)
make any payment of principal of or any interest or premium on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in
all respects with or junior in interest to this Security (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with (1) any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, (2) a dividend reinvestment or stockholder
stock purchase plan or (3) the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the applicable
Extension Period, (b) as a result of an exchange or conversion of any class or
series of the Company's capital stock (or any capital stock of a Subsidiary of
the Company) for any class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock).

      Payment of principal of, premium, if any, and interest on this Security
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Payments of principal, premium, if any, and interest due at the Maturity of this
Security shall be made at the office or agency of the Company maintained for
that purpose in the Place of Payment upon surrender of such Securities to the
Paying Agent, and payments of interest shall be made, subject to such surrender
where applicable, by wire transfer at such place and to such account at a
banking institution in the United States as may be designated in writing to the
Paying Agent at least ten (10) Business Days prior to the date for payment by
the Person entitled thereto unless proper written transfer instructions have not
been received by the relevant record date, in which case such payments shall be
made by check mailed to the address of such Person as such address shall appear
in the Security Register. Notwithstanding the foregoing, so long as the holder
of this Security is the Property Trustee, the payment of the principal of (and
premium, if any) and interest (including any overdue installment of interest and
Additional Tax Sums, if any) on this Security will be made at such place and to
such account as may be designated by the Property Trustee.

      The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the

<PAGE>

subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior Debt,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.

      Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

<PAGE>

      IN WITNESS WHEREOF, the Company has duly executed this certificate on this
____ day of _____________, 2002.

                                    [COMPANY],

                                    By:_________________________________
                                       Name:
                                       Title:

      This is one of the Securities designated therein referred to in the within
mentioned Indenture.

Dated: _______________, 2002

                                    THE BANK OF NEW YORK,
                                      not  in  its  individual  capacity,  but
                                      solely as Trustee

                                    By:_________________________________
                                       Name:
                                       Title:

<PAGE>

                               REVERSE OF SECURITY

      This Security is one of a duly authorized issue of securities of the
Company (the "Securities") issued under the Junior Subordinated Indenture, dated
as of November 1, 2002 (the "Indenture"), between the Company and The Bank of
New York, as Trustee (in such capacity, the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Debt and the Holders of the Securities, and
of the terms upon which the Securities are, and are to be, authenticated and
delivered.

      All terms used in this Security that are defined in the Indenture or in
the Amended and Restated Trust Agreement, dated as of November 1, 2002 (as
modified, amended or supplemented from time to time, the "Trust Agreement"),
relating to HFC Capital Trust IV (the "Trust"), among the Company, as Depositor,
the Trustees named therein and the Holders from time to time of the Trust
Securities issued pursuant thereto, shall have the meanings assigned to them in
the Indenture or the Trust Agreement, as the case may be.

      The Company may, on any Interest Payment Date, at its option, upon not
less than thirty (30) days' nor more than sixty (60) days' written notice to the
Holders of the Securities (unless a shorter notice period shall be satisfactory
to the Trustee) on or after November 15, 2007 and subject to the terms and
conditions of Article XI of the Indenture, redeem this Security in whole at any
time or in part from time to time at a Redemption Price equal to one hundred
percent (100%) of the principal amount hereof, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, to but
excluding the date fixed for redemption; provided, that the Company shall have
received the prior approval of the Office of Thrift Supervision if then
required.

      In addition, upon the occurrence and during the continuation of a Special
Event, the Company may, at its option, upon not less than thirty (30) days' nor
more than sixty (60) days' written notice to the Holders of the Securities
(unless a shorter notice period shall be satisfactory to the Trustee), redeem
this Security, in whole but not in part, subject to the terms and conditions of
Article XI of the Indenture at a Redemption Price equal to one hundred percent
(100%) of the principal amount hereof, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, to but
excluding the date fixed for redemption; provided, that the Company shall have
received the prior approval of the Office of Thrift Supervision if then
required.

      In the event of redemption of this Security in part only, a new Security
or Securities for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof. If less than all the Securities
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than sixty (60) days prior to the Redemption Date by the Trustee from
the Outstanding Securities not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and

<PAGE>

which may provide for the selection for redemption of a portion of the principal
amount of any Security.

      The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities, on behalf of the
Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.

      No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest, including any Additional Interest, on this Security at the times,
place and rate, and in the coin or currency, herein prescribed.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar and duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Securities, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

      The Securities are issuable only in registered form without coupons in
minimum denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities are exchangeable for a like aggregate principal amount of
Securities and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.

      No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

      The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

<PAGE>

      The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that, for United States federal, state and
local tax purposes, it is intended that this Security constitute indebtedness.

      THIS SECURITY SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT
OF LAWS PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

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