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201206728 In the event of loss, Borrower shall give Lender immediate notice by maiL Lender may make proof of loss if uot made promptly by Borrower. Each insurance company concemed is 6ereby authorized and directed to make payment for such loss directly to Lender, instead of to Borrower and to Lender jointly. All or auy part o£the iusurance proceeds may be applied by Leuder, at its option,either(a)to t6e reduction of the indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the order in paragaph 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 shall not extend or postpone the due date of the monthly payments which aze referred to in pazagraph 2, or change t6e amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding indebtedness under the Note and this Sectuity Instrument s6a11 be paid to the entity legally entitled thereto. In the event oF forecloswe of t}us Secwity Instrument or ot6er transfer of title to the Property that extinguishes the indebtedness,all right,title aud interest of Sorrower in and to insurance policies in force shall pass to the purchaser. 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Applieation;Leaseholds.Borrower s6all occupy, establish, and use the Property as Borrower's principal residence within sixty days after the exewtion of this Security Instrument(or within sixty days of a later sale or Uansfer of the Property)and shall continue to occupy the Property as Borrower's principal residence for at least one year after t6e date of occupancy,unless Lender detcrmines that requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist which aze heyond Borrower's conhol. Borrower shall notify Lender of any extenuating cucumstances. Bonower shall not commit waste or destroy, damage ot substantially change the Property or allow the Property to deteriorate,reasonable weaz and tear excepted. Lender may iuspect the Property if the Property is vacant or abandoned or the loan is in default. Lender may take reasonahle action to protect and preserve such vacant or abandoned Property. Borrower shall also be in default if Bonower, during khe loan application process,gave materially false or inaccurate information or statements to Lender(or failed to provide Leuder with any material information) in counection 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 Secwity 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 title shall not be merged unless Lender agrees to the merger in writiug. 6. Condemnation.The proceeds of any award or claim for damages, d'vect or consequential, in connection with any co�demnation or other taking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned and shall be paid to Lender to the extent of the full amount of t6e indebtedness that remains unpaid under the Note and this Security Instrument. Lender shall apply such proceeds to the reduc6on of the indebtedness under the Note and this Security I�strument, 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 aze referred to in paragraph 2,or chauge the amount of such payments.Any excess proceeds over an amount required to pay all outstanding indebtedness under the Note and t6is Security Instrument shall be paid to the entity legally entitled thereto. 7. Chargesto Borrowerand Protectionof Lender'sRightsin the Property.Borrower shallpayall govemmental or municipal charges, fines and impositions that are not included in paragaph 2. Borrower shall pay these obligations on time directly to the entiry which is owed the payment. If failure to pay would adversely affect Lender's interest in the Property, upon Lender's request Bonower shall promptly fiunish w Lender receipts evidencing these payments. If Borrower fails to make these payments or the payments required by pazagraph 2,or fails[o perForm any other covenants and agreements contained in this Securiry Instrument,or there is a legal proceeding that may FHA MorCgage WIiH MERS-NE �`��/ Revised 4f98 Amentled 7/04 VMP� VMP4N(NE)(7105).00 Wolters Kluwer Flnancial Services Paga 4 ot 70 ii��i�iiiiii iii uii��i�ii iiiuii i iiiii iii iiiii iii