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200004540 LOAN #: 2989413 1. RATE REDUCTION OPTION (A) Option to Reduce Interest Rate. I have a Rate Reduction Option that I can exercise in my sole discretion unless I am in default or this Section 1(A) will not permit me to do so. The "Rate Reduction Option" is my option to reduce the interest rate I am required to pay under Section 2 of the Note. I can elect to reduce my interest rate under the Rate Reduction Option as many times as I want, but not more than once each calendar month. If I exercise my Rate Reduction Option on or before the 25th day of the month, then my "Reduced Interest Rate" will take effect on the first day of the month following my exercise of the Rate Reduction Option and my satisfaction of the required conditions set forth below. If I exercise my Rate Reduction Option after the 25th day of the month, then my Reduced Interest Rate will take effect on the first day of the second month following my exercise of the Rate Reduction Option and my satisfaction of the required conditions set forth below. The date on which my Reduced Interest Rate takes effect is called the "Rate Reduction Date." I may exercise my Rate Reduction Option, by meeting the following conditions: (i) I must give notice to the Note Holder by mail, telephone or Internet, or by other means acceptable to the Note Holder, that I want to exercise the Rate Reduction Option; (ii) at and from the time I give this notice (the "Notice Date ") to the Rate Reduction Date, I must not be in default under the Note or the Security Instrument; (iii) by a date specified by the Note Holder, I must pay the Note Holder 2.5 points (the "Points ") as consideration for the Reduced Interest Rate; and (iv) in accordance with Note Holder's requirements, I must (a) sign a modification agreement or confirmation, or (b) via Internet, or other electronic means, acknowledge my consent and intention to be legally bound by the terms of the modification agreement or confirmation set forth on the computer screen (written confirmation by me may also be required). By selecting "I agree" (or similar terms of acceptance) on the computer screen, I indicate that I understand and intend that the modification agreement or confirmation on the computer screen is the legal equivalent of a signed, written contract and is equally binding. By selecting "I agree" (or similar terms of acceptance) on the computer screen, I indicate that I understand and intend that the modification agreement or confirmation on the computer screen is the legal equivalent of a signed, written contract and is equally binding. I agree to be legally bound by a computer - screen acceptance by any other Borrower or by another person who I or another Borrower authorize to access any Internet or other electronic account feature. (B) Option to Finance the Points. I have the option to obtain advances (the "Future Advances ") under the Note to pay all or a portion of the Points, rather than using my own funds, if I satisfy the following conditions (the "Advance Conditions "): (i) I have paid my previous 12 monthly payments required under the Note when due; (ii) the value of the Property has not decreased since the date of the Note; (iii) the total unpaid principal balance of the Note, including the new advance and all previous advances, does not exceed the original principal amount stated on the face of the original Note; (iv) I have not exercised any right to limit or to terminate the operation of the Security Instrument as security for future advances; and (v) the advance is not prohibited by applicable law. Subject to the Advance Conditions that I must satisfy, Lender and I intend that the Future Advances are obligatory. (C) Reduced Interest Rate. My Reduced Interest Rate will equal Fannie Mae's Fixed Rate Convertible Option Mortgage Index on the Notice Date (the "Index "), except as provided below. If my loan includes lender -paid mortgage insurance, my Reduced Interest Rate will be higher than the Index CONV initials "A 0 RATE REDUCTION OPTION RIDER 1 U5242XX (11/99) Page 2 of 4