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Borrower shall also be in default if Borrower, during the loan application process, gave�teriallylalse�or�n�acs ate information or statements 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 conceming 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 tide 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, aze hereby assigned and shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security Inswment.Lender shall apply such proceeds to the reducdon of the indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the order provided in pazagraph 3, and then to prepayment of principal.Any application of the proceeds to the principal shall not extend or postpone the due date of the monthly payments,which aze 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 Borrower and Protection of Lender's Rights in the Property. Borrower shall pay all governmental or municipal chazges,fines and impositions that are not included in paragraph 2. Bonower shall pay these obligations on time direcdy to the entity which is owed the payment. If failure to pay would adversely affect Lender's interest in the Property, upon Lender's request Borrower shall prompfly furnish to Lender receipts evidencing these paymenis. If Borrower fails to make these payments or the payments required by pazagraph 2, or fails to perform any other covenants and agreements contained in this Security Instrument, or there is a legal proceeding tha[ may significandy affect Lender's rights in the Property (such as a proceeding in bankruptcy, for condemnation 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[axes,hazard insurance and other items mentioned in pazagraph 2. Any amounts disbursed by Lender under this paragraph shall become an additional debt of Bonower and be secured by this Security Instrument. T'hese amounts shall bear interest from the date of disbursement, at the Note rate, and at the option of Lender,shall be immediately due and payable. Borrower shall prompdy dischazge any lien which has priority over this Security Instrument unless Bonower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument,Lender may give Bonower a notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days of the giving of notice. 8.Fees.Lender may collect fees and charges authorized by the Secretary. 9.Grounds for Acceleration of Debt. (a) Default. Lender may, except as limited by regulations issued by the Secretary, in the case of payment defaults,require immediate payment in full of all sums secured by this Security Inslrument if: (i) Borrower defaults by failing [o pay in full any monthly payment required by this Security Instrument prior to or on the due date of the next monthly payment,or (ii) Bonower defaults by failing, for a period of thirty days, to perform any other obligations contained in this Security Instrument. (b) Sale Without Credit Approval.Lender shall, if permitted by applicable law (including Secpon 341(d) of the Garn-St.Germain Depository Insdtutions Act of 1982, 12 U.S.C. 1701 j-3(d))and with the prior approval of the Secretary,require immediate payment in full of all sums secured by this Security Insirument if: ��4R(NE)�ssoa�.oi Page 4 01 B Initials: , •� IY;' . V j