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Borrower's escrow account under the federal Real Estate Settlement Procedures Act of 1974 as amended from time to time, 12 U.S.C.
<br />2601 at seq. ( "RESPA "), unless another law that applies to the Funds sets a lesser amount. If so, Lender may, at any time, collect and
<br />hold Funds in an amount not to exceed the lesser amount. Lender may estimate the amount of funds due on the basis of current data
<br />and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with applicable law.
<br />The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including
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<br />Lender, if Lender is such an institution) or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items.
<br />Lender may not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow
<br />Items, unless Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. However, Lender
<br />may require Borrower to pay a one -time charge for an independent real estate tax reporting service used by Lender in connection with
<br />this loan, unless applicable law provides otherwise. Unless an agreement is made or applicable law requires interest to be paid, Lender
<br />shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender may agree in writing, however, that
<br />interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds, showing
<br />credits and debits to the Funds and the purpose for which each debit to the Funds was made. The Funds are pledged as additional
<br />security for all sums secured by this Security Instrument.
<br />If the Funds held by Lender exceed the amounts permitted to be held by applicable law, Lender shall account to Borrower for the
<br />excess Funds in accordance with the requirements of applicable law. If the amount of the Funds held by Lender at any time is not
<br />sufficient to pay the Escrow Items when due, Lender may so notify Borrower in writing, and, in such case Borrower shall pay to Lender
<br />the amount necessary to make up the deficiency. Borrower shall make up the deficiency in no more than twelve monthly payments, at
<br />Lender's sole discretion.
<br />Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by
<br />Lender. If, under paragraph 21, Lender shall acquire or sell the Property, Lender, prior to the acquisition or sale of the Property, shall
<br />apply any Funds held by Lender at the time of acquisition or sale as a credit against the sums secured by this Security Instrument.
<br />3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under paragraphs
<br />1 and 2 shall be applied: first, to any prepayment charges due under the Note; second, to amounts payable under paragraph 2; third
<br />to interest due; fourth, to principal due; and last, to any late charges due under the Note.
<br />4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Property
<br />which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any. Borrower shall pay these
<br />obligations in the manner provided in paragraph 2, or if not paid in that manner, Borrower shall pay them on time directly to the person
<br />owed payment. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this paragraph. If Borrower makes
<br />these payments directly, Borrower shall promptly furnish to Lender receipts evidencing the payments.
<br />Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to
<br />the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien by, or defends
<br />against enforcement of the Tien in, legal proceedings which in the Lender's opinion operate to prevent the enforcement of the lien; or (c)
<br />secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender
<br />determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, Lender may give
<br />Borrower a notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days
<br />of the giving of notice.
<br />5. Hazard or Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the
<br />Property insured against loss by fire, hazards included within the term "extended coverage" and any other hazards, including floods or
<br />flooding, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be
<br />unreasonably withheld. If Borrower fails to maintain coverage described above, Lender may, at Lender's option, obtain coverage to
<br />protect Lender's rights in the Property in accordance with paragraph 7.
<br />All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause. Lender shall have
<br />the right to hold the policies and renewals. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums
<br />and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make
<br />proof of loss if not made promptly by Borrower.
<br />Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property
<br />damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the restoration or repair is not
<br />economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this
<br />Security Instrument, whether or not then due, with any excess paid to Borrower. If Borrower abandons the Property, or does not
<br />answer within 30 days a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may collect the
<br />insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay sums secured by this Security
<br />Instrument, whether or not then due. The 30 -day period will begin when the notice is given.
<br />Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal shall not extend or postpone the
<br />due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If under paragraph 21
<br />the Property is acquired by Lender, Borrower's right to any insurance policies and proceeds resulting from damage to the Property prior
<br />to the acquisition shall pass to Lender to the extent of the sums secured by this Security Instrument immediately prior to the
<br />acquisition.
<br />6. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan
<br />Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at
<br />least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably
<br />withheld, or unless extenuating circumstances exist which are beyond Borrower's control. Borrower shall not destroy, damage or impair
<br />the Property, allow the Property to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture action or
<br />proceeding, whether civil or criminal, is begun that in Lender's good faith judgment could result in forfeiture of the Property or otherwise
<br />materially impair the lien created by this Security Instrument or Lender's security interest. Borrower may cure such a default and
<br />reinstate, as provided in paragraph 18, by causing the action or proceeding to be dismissed with a ruling that, in Lender's good faith
<br />determination, precludes forfeiture of the Borrower's interest in the Property or other material impairment of the lien created by this
<br />Security Instrument or Lender's security interest. Borrower shall also be in default if Borrower, during the loan application process,
<br />gave materially false or inaccurate information or statements to Lender (or failed to provide Lender with any material information) in
<br />connection with the loan evidenced by the Note, including, but not limited to, representations concerning Borrower's occupancy of the
<br />Property as a principal residence. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the
<br />lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless the Lender agrees to the
<br />merger in writing.
<br />Form 3028 9/90
<br />F10291MG (10/99) Page 2 of 5
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