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��14��5�� loss if not made promptly by Barrower. Each insurance company concern�d is hereby authorized and directed to make payment for such loss to Lender, instead of to Bo rr�wer and Lender jvintly. Insurance proceeds shal� be applied to restoration or repair o�f the damaged P�•operty, rf the restoration or repair is �canomically feasible and Lender's security is not lessened. �f the i�estvration vr repair is not ec�noi�ically feasible or Lender's s�curity vvould be l�ssened,the insurance proceeds shali be app�ied firs�to the reduct�on of any indebtedness under the Se�ond Note arid this Security Instrument and�hen to the redu��ion vf the indeb�edness under the First Note and First,�ecurity Instrument. Any excess insurance proceeds o�er an amount required to pay ali �uts�anding indebtedness under the Secand Nnte and this Security �nstrument and the First Note and the First Security Instrument shall be paid to the entity legally entitled thereto. �n the e�ept of foreclosure of this Secur�ty Instrum�nt or other transfer af�itle to the Property that extingu�shes the indebtedness, all right,title and in�erest�f Borrov��er in and to insurance poli�ies �n force shall pass to the purchaser. 4. (]�cupancy, Preser�ation, Maintenance and Protection of th��Property; Borrower"s Loan APplication; Leaseholds. Borravver shall occupy,establ ish,and u��e the Proper�y as Sarrovver's principai residence after the execution of this 5ecurity Instrument and Borrower�or a�least one Borrawer, if initially more than one pers�n are Borrowers}and shall continue ta occupy the Property as Borrower's princ�pal residence for the term of the Security Ins�rument. "Principa� residence" sha11 ha�e the same meani ng as in the Loan Agreement. Borrower shall not commit waste or destroy,damage or substantially change the Property ar a�low the Proper�y to deteri orate, reasanabl e wear and tear excepted. Borraw er sha�1 al so be i n default�f Borrawer, dur�ng the loan app�ication pracess,ga�e ma�erialiy false or inaccurate information or statennents to Lender�or fai led ta pro�id�L�nder with apy material information} in connection with the loan e�idenced by the Note, includ�ng,bu�nat limited to,representatians concerning Borrower's accupancy of the Property as a principal residence. �f this Security Instrum�nt is on a leasehold, Borrower shall comply with the pro�isions of�he lease. If BorrowE�r acquires fee title to the Prnp�rty, the �easehold and fee title shall not be m�rged unless Lender agree:�to the merger in writ�ng. 5. �harges to Borrower and Prote�tion of Lender's Ri�hts in ttie Prop�rty. Barrovver shall pay all go�ernmental or municipal charges, fines and impositions�hat are not included in Paragraph 2. Borraw�r shall pay these obliga�ions on time diree�iy to the entity ��hich is owed the paym�nt. If failure to pay would ad�ersely affect Lender's interest in th�Property, upc�n Lend�r's reques� Borrower shal� promptly furnish to Lender receipts e�idencing these paym�nts. B�frrower shall promptly discharge any l�en whi�h has priority a�er this Security Instrument in the manner pro��d�d in Paragraph I3(c�. �f Borrower fai ls to make these payments or the prop�rty charges r��quired by Paragraph Z,or fails to perform any other co�enants and agreements contained in this Sect�rity Instrument, or there is a legal proceeding that may significantly affec�Lender's rights ir�the Property�such as a proce�ding in bankruptcy, far condemnatian or to enforce laws�r regulations},tr�en Lender may da and pay whate�er is necessary to �rotect�he�a�ue of the Prap�rty and Lender's righ��, in the Proper�y, in�luding payment of taxes, hazard insurance and other items ment�oned in Paragraph 2. To protect Lepder's security in the Property, L�nder sha�l advance��.nd charge to Borrower all amounts due ta the Secretary for the Mortgage Insurance Premium as def n��d in the Loan Agreemen�as well as al� sums due to the �oan s�rvi�er far ser-�icing activities as def ned in the Loan Agre�men�. Any amounts disbursed by Lender under�his Paragraph shall become an additYorial debt of B�rrower as pro�ided for �n the Loan A�reement and shal� b�secured by thi� Security I nstru rnent. Page 3❑f 12 HECM Seca��d Deed�f Tr�st--�