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<br /> showing credits and debits to the Funds and the purpose for which each debit to the Funds was made. The Funds are
<br /> 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 by
<br /> Lender at any time is not suff'icient to pay the Escrow Items when due, Lender may so notify Bonower in writing, and, in
<br /> such case Bonower shall pay to Lender the amount necessary to make up the deficiency. Bonower shall make up the
<br /> deficiency in no more than twelve monthly gayments,at Lender's sole discretion.
<br /> Upon payment in full of all sums secured by this Security Instrument,Lender shall prompfly refund to Bonower any
<br /> Funds held by Lender. If, under paragraph 21,Lender shall acquire or sell the Properiy,Lender,prior to the acquisition or
<br /> sale of the Property, shall apply any Funds held by Lender at the time of acquisition or sale as a credit against the sums
<br /> secured by this Security Instrument.
<br /> 3. Application of Payments. Unless applicable law provides otherwise, a11 payments received by Lender
<br /> under paragraphs 1 and 2 shall be applied;first,to any prepayment charges due under the Note; second, to amounts payable
<br /> under paragraph 2;third,to interest due;forth,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
<br /> Property which may attain priority over this Security Instrument,and leasehold payments or ground rents, if any. Bonower
<br /> shall pay these obligations in the matter provided in paragraph 2, or if not paid in that manner, Bonower shall pay them on
<br /> time directly to the person owed payment. Borrower shall promptly furnish to Lender all notices of amounts to be paid
<br /> under th�aragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to Lender receipts
<br /> evidencing the payments.
<br /> Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a)
<br /> agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b)contests in good
<br /> faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to
<br /> prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to Lender
<br /> subordinating the lien to this Security Instrument. If Lender deternunes that any part of the Property is subject to a lien
<br /> which may attain priority over this Securiry°instrument,Lender may give Bonower a notice identifying the lien. Bonower
<br /> shall satisfy the line or take one or more of the actions set forth above within 10 days of the giving of notice.
<br /> 5. Hazard or Property Insurance. Borrower shall keep the improvements now existing or hereafter erected
<br /> on 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 and
<br /> for the periods that Lender requires. The insurance carrier providing the insurance shall be chosen by Borrower subject to
<br /> Lender's approval which shall not be unreasonably withheld. If Bonower fails to maintain coverage described above,
<br /> Lender may,at Lender's option,obtain coverage to protect Lender's rights in the Property in accordance with paragraph 7.
<br /> All insurance policies and renewals sha11 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 required, Borrower shall promptly give to Lender
<br /> all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance
<br /> carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.
<br /> Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoradon or repair
<br /> of the Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the
<br /> restoration or repair if not economically feasible or Lender's security would be lessened, the insurance proceeds shall be
<br /> applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Bonower. If
<br /> Borrower abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier has
<br /> offered to settle a claim,then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore
<br /> the Property or to pay sums secured by this Security Instrument, whether or not then due. The 30-day period will begin
<br /> when the notice is given.
<br /> Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal shall not extend or
<br /> postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If
<br /> under paragraph 21 the Property is acquired by Lender, Borrower's right to any insurance policies and proceeds resulting
<br /> from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security
<br /> Instrument immediately prior to the acquisition.
<br /> 6. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan
<br /> Application; Leaseholds. Bonower shall occupy, establish, and use the Property as Borrower's principal residence
<br /> within sixty days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's
<br /> principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which
<br /> consent shall not be unreasonably withheld,or unless extenuadng circumstances e�st which are beyond Borrower's control.
<br /> Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate, or commit waste on the
<br /> Properiy. Bono��er shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in
<br /> Lender's good faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this
<br /> Security Instrument or Lender's security interest. Borrower may cure such a default and reinstate, as provided in paragraph
<br /> 18, by causing the action or proceeding to be dismissed with a ruling that, in Lender's good faith determination, precludes
<br /> forfeiture of the Bonower's interest in the Property or other material impairment of the lien created by this Security
<br /> 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
<br /> information) in connection with the loan evidenced by the Note, including, but not limited to, representations concerning
<br /> Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold,Bonower shall
<br /> comply with all the provision of the lease. If Bonower acquires fee title to the Property, the leasehold and the fee dtle shall
<br /> not merge unless the 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 the
<br /> agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights
<br /> in the Property (such as a proceeding gin bankruptcy, probate, for condemnation or forfeiture or to enforce laws or
<br /> regulations), then Lender may do and pay for whatever is necessary to protect the value of the Property and the Lender's
<br /> rights in the Property. Lender's actions may include paying any sums secured by a lien which has priority over this Security
<br /> Instrument, appearing in court, paying reasonable attorney's fees and entering on the Property to make repairs. Although
<br /> Lender may take action under this paragraph 7,Lender dces not have to do so.
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