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200001'735
<br />Loan Number: 121013145 Servicing Number: 264392-2 Date: 02/24/00
<br />If Borrower obtains earthquake insurance, any other hazard insurance, or any other insurance on the Property and such
<br />insurance is not specifically required by Lender, then such insurance shall (i) name Lender as loss payee thereunder, and (ii) be
<br />subject to the provisions of this paragraph 5.
<br />6. Occupancy, Preservation, Maintenance and Protection of the Property; Borrowers Loan Application; Leaseholds.
<br />Borrower acknowledges that the Lender does not desire to make a loan to Borrower secured by this property on the terms contained
<br />in the Note unless the property is to be occupied by Borrower as Borrower's primary/secondary residence. Lender makes non -
<br />owner residence loans of different terms. Borrower promises and assures Lender that Borrower intends to occupy this property as
<br />Borrower's primary/secondary residence and that Borrower will so occupy this property as its sole primary/secondary residence
<br />within sixty (60) days after the date of the Security Instrument. If Borrower breaches this promise to occupy the property as
<br />Borrower's primary/secondary residence, then Lender may invoke any of the following remedies, in addition to the remedies
<br />provided in the Security Instrument; (1) Declare all sums secured by the Security Instrument due and payable and foreclose the
<br />Security Instrument, (2) Decrease the term of the loan and adjust the monthly payments under the Note accordingly, increase the
<br />interest rate and adjust the monthly payments under the Note accordingly, or (3) require that the principal balance be reduced to
<br />a percentage of either the original purchase price or the appraised value then being offered on non -owner occupied loans.
<br />Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate, or commit waste on the
<br />Property. Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in Lender's
<br />good faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this Security
<br />Instrument or Lender's security interest. Borrower may cure such a default and reinstate, as provided in paragraph 18, by causing
<br />the action or proceeding to be dismissed with a ruling that, in Lender's good faith determination, precludes forfeiture of the
<br />Borrower's interest in the Property or other material impairment of the lien created by this Security Instrument or Lender's security
<br />interest. Borrower shall also be in default if Borrower, during the loan application process, gave materially false or inaccurate
<br />information or statements to Lender (or failed to provide Lender with any material information) in connection with the loan
<br />evidenced by the Note, including, but not limited to, representations concerning Borrower's occupancy of the Property as a principal
<br />residence. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower
<br />acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing.
<br />Borrower shall, at Borrower's own expense, appear in and defend any action or proceeding purporting to affect the Property
<br />or any portion thereof or Borrower's title thereto, the validity or priority of the lien created by this Security Instrument, or the rights
<br />or powers of Lender or Trustee with respect to this Security Instrument or the Property. All causes of action of Borrower, whether
<br />accrued before or after the date of this Security Instrument, for damage or injury to the Property or any part thereof, or in
<br />connection with any transaction financed in whole or in part by the proceeds of the Note or any other note secured by this Security
<br />Instrument, by Lender, or in connection with or affecting the Property or any part thereof, including causes of action arising in tort
<br />or contract and causes of action for fraud or concealment of a material fact, are, at Lender's option, assigned to Lender, and the
<br />proceeds thereof shall be paid directly to Lender who, after deducting therefrom all its expenses, including reasonable attorneys'
<br />fees, may apply such proceeds to the sums secured by this Security Instrument or to any deficiency under this Security Instrument
<br />or may release any monies so received by it or any part thereof, as Lender may elect. Lender may, at its option, appear in and
<br />prosecute in its own name any action or proceeding to enforce any such cause of action and may make any compromise or
<br />settlement thereof. Borrower agrees to execute such further assignments and any other instruments as from time to time may be
<br />necessary to effectuate the foregoing provisions and as Lender shall request.
<br />7. Protection of Lender's Rights in the Property. If Borrower fails to perform the covenants and agreements contained in
<br />this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights in the Property (such as a
<br />proceeding in bankruptcy, probate, for condemnation or forfeiture or to enforce laws or regulations), then Lender may do and pay
<br />for whatever is necessary to protect the value of the Property and Lender's rights in the Property. Lender's actions may include
<br />paying any sums secured by a lien which has priority over this Security Instrument, appearing in court, paying reasonable attorneys'
<br />fees and entering on the Property to make repairs. Although Lender may take action under this paragraph 7, Lender does not have
<br />to do so.
<br />Any amounts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this Security
<br />Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from the date of
<br />disbursement at the Note rate in effect from time to time and shall be payable, with interest, upon notice from Lender to Borrower
<br />requesting payment.
<br />8. Mortgage Insurance. If Lender required mortgage insurance as a condition of making the loan secured by this Security
<br />Instrument, Borrower shall pay the premiums required to maintain the mortgage insurance in effect. If, for any reason, the mortgage
<br />insurance coverage required by Lender lapses or ceases to be in effect, Borrower shall pay the premiums required to obtain coverage
<br />substantially equivalent to the mortgage insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of
<br />the mortgage insurance previously in effect, from an alternate mortgage insurer approved by Lender. If substantially equivalent
<br />mortgage insurance coverage is not available, Borrower shall pay to Lender each month a sum equal to one - twelfth of the yearly
<br />mortgage insurance premium being paid by Borrower when the insurance coverage lapsed or ceased to be in effect. Lender will
<br />accept, use and retain these payments as a loss reserve in lieu of mortgage insurance. Loss reserve payments may no longer be
<br />required, at the option of Lender, if mortgage insurance coverage (in the amount and for the period that Lender requires) provided
<br />by an insurer approved by lender again becomes available and is obtained. Borrower shall pay the premiums required to maintain
<br />mortgage insurance in effect, or to provide a loss reserve, until the requirement for mortgage insurance ends in accordance with
<br />any written agreement between Borrower and lender or applicable law.
<br />9. Inspection. Lender or its agent may make reasonable entries upon and inspections of the Property. Lender shall give
<br />Borrower notice at the time of or prior to an inspection specifying reasonable cause for the inspection.
<br />10. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any
<br />condemnation or other taking of any, part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall
<br />be paid to Lender. Lender may apply, use or release the condemnation proceeds in the same manner as provided in paragraph 5
<br />hereof with respect to insurance proceeds.
<br />If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the condemnor offers to make
<br />an award or settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender
<br />is authorized to collect and apply the proceeds, at its option, either to restoration or repair of the Property or to the sums secured
<br />by this Security Instrument, whether or not then due.
<br />Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal shall not extend or
<br />Page 3 of 6 NED10013 (05- 28 -98)
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