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241204258 In the event of loss, Bonower sha11 give Lender immediate notice by mail. Lender may make proof of loss if not made promptly by Borrower. Each insurance company concerned is hereby authorized and d'uected to make payment for such loss directly to Lender, instead of to Bonower and to Lender jointly. All or any part of the insurance proceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the order in paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of the damaged Property. Any application of the proceeds to the principal sha11 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 insurance proceeds over an amount required to pay a11 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 Instrument or other transfer of title to the Property that extinguishes the indebtedness, a11 right, title and interest of Bonower in and to insurance policies in force sha11 pass to the purchaser. 5. Occupancy, Preservation, Maintenance and Protection of the Properly; Borrower's Loan Application; Leaseholds. Bonower sha11 occupy, establish, and use the Property as Bonower'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 sha11 continue to occupy the Property as Bonower's principal residence for at least one yeaz after the date of occupancy, unless Lender determines that requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist wluch aze beyond Borrower's control. Borrower shall notify Lender of any extenuating circumstances. Borrower shall 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. Bonower shall 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, Borrower sha11 comply with the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title sha11 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 condemnarion or other taking of any part of the Properly, 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 Instrument. Lender sha11 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 sha11 not extend or postpone the due date of the monthly payments, which aze referred to in pazagraph 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 sha11 be paid to the entity legally entitled thereto. 7. Charges to Borrower and Protection of Lender's Rights in the Property. Bonower sha11 pay a11 governmental or municipal charges, fines and impositions that are not included in pazagraph 2. Borrower shall pay these obligations on time d'uectly 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 sha11 promptly furnish to Lender receipts evidencing these payments. If Bonower 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 that may 2200263535 D V4NNE FHA Mortgage W�TH MERS-NE Reviaed 4/96 Amend 7/04 VMP p VMP4NINE) (1105) Woltera Kluwer Finendal Servicea /- I Pepe 4 of 10 h` ��