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201208122 In the evenl of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not made promptly by Borrower. Each insurance company concerned is here6y authorized and directed [o make payment for such loss directly [o Lender, instead of to Borrower and to Lender jointly. All or any par[ of the insurance proceeds may be applied by Lender, a[ it� option, either (a) to the reduction of the indebtedness under the Note and this Searrity Inshument, first [o any delinquent amounts applied in the order in pazagraph 3, and then to prepayment of principal, or (b) to the restoralion or repair of the damaged Property. Any application of the proceeds ro the principal shall not extend or poslpo�e [he due date of the monthly payments which are referred ro in paragraph Z, or change the amounl of such payments. Any excess insurance proceeds ovec an amoun[ required to pay all outstanding indebledness under [he Note and this Security Instrument shall be paid to the entity legally entitled there[o. In the even[ of foreclosare of this Security Instrument or oUier Iransfer of fltle to the Property [hat extinguishes lhe indebiedness, all right, [itle and interest of Borrower in and to insurance pollcies in force shall pass to the purchaser. 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan AppliCation; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after the execution of this Secarity Instrument (or within sixty days of a later sale or [ransfer of the Properry) and shall conlinae to occupy the Property as Borrower's principal residence for at least one year affer the date of occupancy, unless Lender determines that requiremenl will cause undue hardship for Borrower, or unless eactenaating circumstances exist which are beyond Sorrower's conhol. Borrower shall notify Lender of any extenuating circumstances. Borrower shall not commit waste or destroy, damage or su6stantially change the Property or allow the Property to de[eriorate, 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 information or slalemen[s to Lender (or failed Co provide Lender with a�y material Informalion) in connection with the loan evidenced hy the Note, including, 6ut not limited t0. represen[aflons concerntng Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold, Borrower shall comply with [he provisions of the lease. If Borrower acquires fee title to the Properly, fhe leasehold and fee [iHe shall not be merged unless Lender agrees [o 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 shall be paid to Lender to [he extent of the full amount of the indeb[edcess that reinains unpaid under the No[e and this Security instrument Lender shall apply such proceeds to lhe reduction of the indebtedness under the Nole and this Securily Inslrumen[, flrst to any delinquen[ amounts applied in the order provided in paragraph 3, and then Io prepaymen[ 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 anuount required to pay all outstanding Inde6tedness under the Note and this Security Instrument shall be paid ro 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 charges, ftnes and impositions that are not included in paragraph 2. Borrower shall pay these obliga[ions on time directly to the eu6ty which is owed the paymenL If failure to pay would adversely affect Lender's interest in the Prnperty, upon Lender's request Borrower shall prompUy furnish to Lender receipts evidencing these payments. If Borrower fails to m�ake these paymenls or the payments required by paragraph 2, or fails to perform any other covenants and agreements wntained in Ihis Security Instnment, or there is a legal proceeding that may 001123168426 CI[Ibank 3.Z61.12 V6 FHA Mortgage WITH MERS-NE Revisetl 9/96 VMP(`q VMP4N(NE)(1109).00 Wotten Kluwer Financial Scrvices Pagc 4 of'10