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20i508843
<br />If Borrower pays Funds to Lender, the Funds shall be held in an institution the deposits or
<br />accounts of which are insured or guaranteed by a Federal or state agency (including Lender if
<br />Lender is such an institution). Lender shall apply the Funds to pay said taxes, assessments,
<br />insurance premiums and ground rents. Lender may not charge for so holding and applying the
<br />Funds, analyzing said account or verifying and compiling said assessments and bills, unless
<br />Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a
<br />charge. Borrower and Lender may agree in writing at the time of execution of this Security
<br />Instrument that interest on the Funds shall be paid to Borrower, and unless such agreement is
<br />made or applicable law requires such interest to be paid, Lender shall not be required to pay
<br />Borrower any interest or earnings on the Funds. Lender shall give to Borrower, without charge, an
<br />annual accounting of the Funds showing credits and debits to the Funds and the purpose for
<br />which each debit to the Funds was made. The Funds are pledged as additional security for the
<br />sums secured by this Security Instrument.
<br />If the amount of the Funds held by Lender, together with the future monthly installments of
<br />Funds payable prior to the due dates of taxes, assessments, insurance premiums and ground
<br />rents, shall exceed the amount required to pay said taxes, assessments, insurance premiums and
<br />ground rents as they fall due, such excess shall be, at Borrower's option, either promptly repaid
<br />to Borrower or credited to Borrower on monthly installments of Funds. If the amount of the Funds
<br />held by Lender shall not be sufficient to pay taxes, assessments, insurance premiums and ground
<br />rents as they fall due, Borrower shall pay to Lender any amount necessary to make up the
<br />deficiency in one or more payments as Lender may require.
<br />Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly
<br />refund to Borrower any Funds held by Lender. If under paragraph 22 hereof the Property is sold or
<br />the Property is otherwise acquired by Lender, Lender shall apply, no later than immediately prior
<br />to the sale of the Property or its acquisition by Lender, any Funds held by Lender at the time of
<br />application as a credit against the sums secured by this Security Instrument.
<br />3. Application of Payments. Unless applicable law provides otherwise, all payments received
<br />by Lender under the Credit Agreement and paragraphs 1 and 2 hereof shall be applied by Lender
<br />first in payment of amounts payable to Lender by Borrower under paragraph 2 hereof, second, (in
<br />the order Lender chooses) to any finance charges, other charges and collection costs owing, and
<br />third, to the principal balance under the Credit Agreement.
<br />4. Prior Mortgages and Deeds of Trust; Charges; Liens. Borrower shall perform all of
<br />Borrower's obligations under any mortgage, deed of trust or other security agreement with a lien
<br />which has priority over this Security Instrument, including Borrowers covenants to make
<br />payments when due. Except to the extent that any such charges or impositions are to be paid to
<br />Lender under paragraph 2, Borrower shall pay or cause to be paid all taxes, assessments and
<br />other charges, fines and impositions attributable to the Property which may attain a priority over
<br />this Security Instrument, and leasehold payments or ground rents, if any. Within five days after
<br />any demand by Lender, Borrower shall exhibit to Lender receipts showing that all amounts due
<br />under this paragraph have been paid when due.
<br />5. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter
<br />erected on the Property insured against loss by fire, hazards included within the term "extended
<br />coverage," floods and such other hazards as Lender may require and in such amounts and for
<br />such periods as Lender may require. Unless Lender in writing requires otherwise, the policy shall
<br />provide insurance on a replacement cost basis in an amount not less than that necessary to
<br />comply with any coinsurance percentage stipulated in the hazard insurance policy, and the
<br />amount of coverage shall be no less than the Maximum Principal Balance plus the full amount of
<br />any lien which has priority over this Security Instrument.
<br />The insurance carrier providing the insurance shall be chosen by Borrower subject to approval
<br />by Lender; provided, that such approval shall not be unreasonably withheld. All insurance policies
<br />and renewals thereof shall be in a form acceptable to Lender and shall include a standard
<br />mortgage clause in favor of and in a form acceptable to Lender. Lender shall have the right to hold
<br />the policies and renewals thereof, subject to the terms of any mortgage, deed of trust or other
<br />security agreement with a lien which has priority over this Security Instrument.
<br />In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender.
<br />Lender may make proof of loss if not made promptly by Borrower. All insurance proceeds are
<br />hereby assigned to Lender and shall be paid to Lender to the extent of all sums secured by this
<br />Security Instrument, subject to the terms of any mortgage, deed of trust or security agreement
<br />with a lien which has priority over this Security Instrument. Unless Lender and Borrower
<br />otherwise agree in writing, insurance proceeds shall be applied to restore or repair the Property, if
<br />it is economically feasible to do so.
<br />If the Property is abandoned by Borrower, or if Borrower fails to respond to Lender within 30
<br />days from the date notice is mailed by Lender to Borrower that the insurance carrier offers to
<br />settle a claim for insurance benefits, Lender is authorized to collect and apply the insurance
<br />proceeds at Lender's option either to restoration or repair of the Property or to the sums secured
<br />by this Security Instrument.
<br />ENE998 -e
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