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200004546
<br />LOAN #: 2989413
<br />Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the
<br />Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the restoration or
<br />repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums
<br />secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. If Borrower abandons the
<br />Property, or does not answer within 30 days a notice from Lender that the insurance carrier has offered to settle a claim, then
<br />Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay sums secured
<br />by this Security 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
<br />the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If under paragraph
<br />21 the Property is acquired by Lender, Borrower's right to any insurance policies and proceeds resulting from damage to the
<br />Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security Instrument immediately
<br />prior to the acquisition.
<br />6. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application; Leaseholds.
<br />Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after the execution of
<br />this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the
<br />date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless
<br />extenuating circumstances exist which are beyond Borrower's control. Borrower shall not destroy, damage or impair the Property,
<br />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
<br />otherwise materially impair the lien created by this Security Instrument or Lender's security interest. Borrower may cure such a
<br />default and reinstate, as provided in paragraph 18, by causing the action or proceeding to be dismissed with a ruling that, in
<br />Lender's good faith determination, precludes forfeiture of the Borrower's interest in the Property or other material impairment of
<br />the lien created by this Security Instrument or Lender's security interest. Borrower shall also be in default if Borrower, during the
<br />loan application process, gave materially false or inaccurate information or statements to Lender (or failed to provide Lender with
<br />any material information) in connection with the loan evidenced by the Note, including, but not limited to, representations
<br />concerning Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold, Borrower
<br />shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall
<br />not merge unless Lender agrees to the merger in writing.
<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 alien which has priority over this Security Instrument, appearing in court, paying reasonable
<br />attorneys' fees and entering on the Property to make repairs. Although Lender may take action under this paragraph 7, Lender does
<br />not have 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 and shall be payable, with interest, upon notice from Lender to Borrower 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
<br />mortgage insurance coverage required by Lender lapses or ceases to be in effect, Borrower shall pay the premiums required to
<br />obtain coverage substantially equivalent to the mortgage insurance previously in effect, at a cost substantially equivalent to the cost
<br />to Borrower of the mortgage insurance previously in effect, from an alternate mortgage insurer approved by Lender. If substantially
<br />equivalent mortgage insurance coverage is not available, Borrower shall pay to Lender each month a sum equal to one - twelfth of
<br />the yearly mortgage insurance premium being paid by Borrower when the insurance coverage lapsed or ceased to be in effect.
<br />Lender will accept, use and retain these payments as a loss reserve in lieu of mortgage insurance. Loss reserve payments may no
<br />longer be required, at the option of Lender, if mortgage insurance coverage (in the amount and for the period that Lender requires)
<br />provided by an insurer approved by Lender again becomes available and is obtained. Borrower shall pay the premiums required to
<br />maintain mortgage insurance in effect, or to provide a loss reserve, until the requirement for mortgage insurance ends in accordance
<br />with 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.
<br />In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Security Instrument,
<br />whether or not then due, with any excess paid to Borrower. In the event of a partial taking of the Property in which the fair market
<br />value of the Property immediately before the taking is equal to or greater than the amount of the sums secured by this Security
<br />Instrument immediately before the taking, unless Borrower and Lender otherwise agree in writing, the sums secured by this
<br />Security Instrument shall be reduced by the amount of the proceeds multiplied by the following fraction: (a) the total amount of the
<br />sums secured immediately before the taking, divided by (b) the fair market value of the Property immediately before the taking.
<br />Any balance shall be paid to Borrower. In the event of a partial taking of the Property in which the fair market value of the
<br />Property immediately before the taking is less than the amount of the sums secured immediately before the taking, unless Borrower
<br />and Lender otherwise agree in writing or unless applicable law otherwise provides, the proceeds shall be applied to the sums
<br />secured by this Security Instrument whether or not the sums are then due.
<br />If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the condemnor offers to make an
<br />award or settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is
<br />authorized to collect and apply the proceeds, at its option, either to restoration or repair of the Property or to the sums secured by
<br />this Security Instrument, whether or not then due.
<br />- 6H(NE) (9401).03 CHL (01/98) Page 3 of 6
<br />Initials: (e %
<br />Form 3028 9/90
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