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201203�9� monthly payments which aze 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 Instrument sha11 be paid to the entity legally entitled thereto. In the event of foreclosure of this Security lnstrument or other transfer of title to the Property that extinguishes the indebtedness, all right, ritle and interest of Bonower in and to insurance policies in force shall pass to the purchaser. 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application; Leaseholds. Bonower sha11 occupy, establish, and use the Property as Borrower's principal residence within sixty days after the execution of this Security Instrument (or within sixty days of a later sale or transfer of the Property) and shall continue to occupy the Property as Bonower' s principal residence for at least one year after the date of occupancy, unless Lender determines that requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist which aze beyond Bonower' s control. Borrower shall notify Lender of any extenuating circumstances. Bonower sha11 not commit waste or destroy, damage or substantially change the Property or a11ow 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 sha11 also be in default if Bonower, during the loan application process, gave materially false or inaccurate 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 concerning Borrower' s occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold, Bonower shall comply with the provisions of the lease. If Bonower acquires fee title to the Property, the leasehold and fee title shall not be merged unless Lender agrees to the merger in writing. 6. Condemnation. The proceeds of any awazd 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 sha11 be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security Instrument. Lender sha11 apply such proceeds to the reduction of the indebtedness under the Note and this Security Instrwnent, 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 postpone 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 Se,curity Instrument sha11 be paid to the entity legally entitled thereto. 7. Charges to Borrower and Protection of Lender's Rights in the Property. Borrower sha11 pay all governmental or municipal charges, fines and impositions that are not included in paragraph 2. Borrower shall pay these obligations on time directly 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 promptly fiunish to Lender receipts evidencing these payments. If Bonower fails to make these payments or the payments required by paragraph 2, or fails to perForm any other covenants and agreements contained in this Securiry Instrument, or there is a legal proceeding that may significantly 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 Properiy and Lender' s rights in the Property, including payment of tal�es, hazard insurance and other items mentioned in pazagraph 2. 0451203248 FHA Deed of Trust-NE 4/96 VMP p VMP4R(NE)(1109) Walters Kluwer Flnencial Services Page 4 of 10