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�� r� :�� monthly payments which are referred to in paragraph 2, or change the amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Insirument shall be paid to the entity legally entitled thereto. In the event of foreclosure of this Security Instrument or other transfer of tifle to the Property that extinguishes the indebtedness, all right, tifle and interest of Borrower in and to +nc�*ansp policies in force shall pass to the purchaser. 5. Occupency, Preservation, Maintenance �nd Protection of the Property; Borrower's Loen Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after the execution of this Security Inslrument (or within sixty days of a later sale or transfer of the Property) and shall continue to occupy the Property as Borrower's principal residence for at least one year after the da.te of occupancy, unless Lender deternunes that requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist which are beyond Borrower's conttol. Bonower shall notify Lender of any extenuating circumstances. Borrower shall not commit waste or destroy, damage or substantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted. Lender may inspect the Property if the Property is vacant or abandoned or the loan is in default. Lender may take reasonable action to protect and preserve such vacant or abandoned Property. Borrower shall also be in default if Borrower, during the loan application process, gave materially false or inaccurate infnrmation or sta.tements to Lender (or failed to provide Lender with any material information) in connection with the loan evidenced by the Note, including, but not limited to, representations concerning Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold, Borrower shall comply with the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee tifle shall not be merged unless Lender agrees to the merger in writing. 6. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned and sha11 be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security Inslzument. Lender shall apply such proceeds to the reduction of the indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the order provided in paragraph 3, and then to prepayment of principal. Any application of the proceeds to the principal shall not extend or postgone the due date of the monthly payments, which are referred to in paragraph 2, or change the amount of such payments. Any excess proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto. 7. Charges to Bor�ower and Protection of Lender's Rights in the Property. Borrower shall pay all governmental or municipal charges, fines and impositions that are not included in paragraph 2. Borrower shall pay these obligations on time direcdy to the entity which is owed the payment. ff failure to pay would adversely affect Lender's interest in the Progerly, upon Lender's request Borrower shall prompfly furnish to Lender receipts evidencing these payments. If Borrower fails to make these payments or the payments required by paragraph 2, or fails to perform any other covenants and agreements containeci in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights in the Property (such as a proceeding in ban�uptcy, for condemna.tion or to enforce laws or regulations), then Lender may do and pay whatever is necessary to protect the value of the Property and Lender's rights in the Property, including payment of taxes, hazard insurance and other items mentioned in paragraph 2. FHA Deed of TrustrNE 4 � 6 VMP � VMP4RINE) 111061.00 Wol�ere Kluwer Flnancial Sarvicea Paga 4 0} 10