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<br />COVENANTS. Borrower and Lender covenant and agree as follows:
<br />1. Payment of Principal and Interest; Prepayment and Late Charges. Borrower shall promptly pay when due the
<br />principal of and interest on the debt evidenced by the Note and any prepayment and late charges due under the Note.
<br />2. Funds for Taxes and Insurance. Subject to applicable law or to a written waiver by Lender, Borrower shall
<br />pay to Lender on the day monthly payments are due under the Note, until the Note is paid in full, a sum ( "Funds ")
<br />for: (a) yearly taxes and assessments which may attain priority over this Security Instrument as a lien on the Property;
<br />(b) yearly leasehold payments or ground rents on the Property, if any; (c) yearly hazard or property insurance
<br />premiums; (d) yearly flood insurance premiums, if any; (e) yearly mortgage insurance premiums, if any; and (t) any
<br />sums payable by Borrower to Lender, in accordance with the provisions of paragraph 8, in lieu of the payment of
<br />mortgage insurance premiums. These items are called "Escrow Items." Lender may, at any time, collect and hold Funds
<br />in an amount not to exceed the maximum amount a lender for a federally related mortgage loan may require for
<br />Borrower's escrow account under the federal Real Estate Settlement Procedures Act of 1974 as amended from time
<br />to time, 12 U.S.C. § 2601 et se g. ( "RESPA "), unless another law that applies to the Funds sets a lesser amount. If
<br />so, Lender may, at any time, collect and hold Funds in an amount not to exceed the lesser amount. Lender may
<br />estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future
<br />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
<br />(including Lender, if Lender is such an institution) or in any Federal Home Loan Bank. Lender shall apply the Funds
<br />to pay the Escrow Items. Lender may not charge Borrower for holding and applying the Funds, annually analyzing
<br />the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and applicable
<br />law permits Lender to make such a charge. However, Lender may require Borrower to pay a one -time charge for an
<br />independent real estate tax reporting service used by Lender in connection with this loan, unless applicable law
<br />provides otherwise. Unless an agreement is made or applicable law requires interest to be paid, Lender shall not be
<br />required to pay Borrower any interest or earnings on the Funds. Borrower and Lender may agree in writing, however,
<br />that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the
<br />Funds, showing credits and debits to the Funds and the purpose for which each debit to the Funds was made. The
<br />Funds are pledged as additional 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
<br />Borrower for the excess Funds in accordance with the requirements of applicable law. If the amount of the Funds held
<br />by Lender at any time is not sufficient to pay the Escrow Items when due, Lender may so notify Borrower in writing,
<br />and, in such case Borrower shall pay to Lender the amount necessary to make up the deficiency. Borrower shall make
<br />up the deficiency in no more than twelve monthly payments, at Lender's sole discretion.
<br />Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower
<br />any Funds held by Lender. If, under paragraph 21, Lender shall acquire or sell the Property, Lender, prior to the
<br />acquisition or sale of the Property, shall apply any Funds held by Lender at the time of acquisition or sale as a credit
<br />against the sums secured by this Security Instrument.
<br />3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under
<br />paragraphs 1 and 2 shall be applied in the following order: first, to any prepayment charges due under the Note;
<br />second, to amounts payable under paragraph 2; third, to interest due; fourth, to principal due; and last, to any late
<br />charges due under the Note.
<br />4. Charges; Liens. Borrower shall perform all of Borrower's obligations under any mortgage, deed of trust or
<br />other security agreement with a lien which has priority over this Security Instrument, including Borrower's covenants
<br />to make payments when due. Any default by Borrower under any such mortgage, deed of trust or other security
<br />agreement shall be a default under this Security Instrument and the Note. Borrower shall pay or cause to be paid all
<br />taxes, assessments and 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. Borrower shall pay these obligations in the
<br />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.
<br />If Borrower makes these payments directly, Borrower shall promptly furnish to Lender receipts evidencing the
<br />payments.
<br />5. Hazard or Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on
<br />the Property insured against loss by fire, hazards included within the term "extended coverage" and any other hazards,
<br />including floods or flooding, for which Lender requires insurance. This insurance shall be maintained in the amounts
<br />and for the periods that Lender requires. The insurance carrier providing the insurance shall be chosen by Borrower
<br />subject to Lender's approval which shall not be unreasonably withheld. If Borrower fails to maintain coverage described
<br />above, Lender may, at Lender's option, obtain coverage to protect Lender's rights in the Property in accordance with
<br />paragraph 7.
<br />All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause.
<br />Lender shall have the right to hold the policies and renewals. If Lender requires, Borrower shall promptly give to
<br />Lender all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to
<br />the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.
<br />Unless Lender and Borrower otherwise agree in writing, any insurance proceeds shall be applied first to reimburse
<br />Lender for costs and expenses incurred in connection with obtaining any such insurance proceeds, and then, at Lender's
<br />option, in such order and proportion as it may determine in its sole and absolute discretion, and regardless of any
<br />impairment of security or lack thereof: (i) to the sums secured by this Security Instrument, whether or not then due,
<br />and to such components thereof as Lender may determine in its sole and absolute discretion; and /or (ii) to Borrower
<br />to pay the costs and expenses of necessary repairs or restoration of the Property to a condition satisfactory to Lender.
<br />If Borrower abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier
<br />has offered to settle a claim, Lender may collect the insurance proceeds. Lender may, in its sole and absolute
<br />discretion, and regardless of any impairment of security or lack thereof, use the proceeds to repair or restore the
<br />Property or to pay the sums secured by this Security Instrument, whether or not then due. The 30 -day period will
<br />begin when the notice is given.
<br />NEBRASKA ARM PROGRAMS (REV. 03/n
<br />Document systems, Inc. (800) 649 -1362 Page 2 of 7
<br />Borrower Initials
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