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. tQ3~ . 11089~ 5. Hazard or Propertv Insurance. Borrower shall keep the Improvements no'ft e:r.:I'itmg o. hereafter e~ed on the . Property insured against loss. by fire. hazards included within the term "extended coverage" and any other hazards, including floods or flooding. for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The insurance cartier providing the insurance shall be chosen by Borrower subject to Lender'~ approval which shall not be unreasonably withheld. If Borrower fails to maintain coverage described above. Lender may, at Lender's option. obtain coverage to protect Lender's rights in the Property in accordance with paragraph 7. All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage cl:mse. Lender shall have the right to hold the policies and renewals. If Lender requires. Borrower shall promptly give to Leuh:r all receipts of paid premiums and renewal notices. In the event of loss. Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing. insurance proceeds shall be applied to restoration or repair of the Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the 'restoration or repair is not economically feasible or Lender's security would be lessened. the insurance prpceeds shall be applied to the sums secured by this Secur\0' Instrument. whether or not then due, with any excess paid to Borrower. If Borrower abandons the Property. or does not answer within 30 days a notice from L"nder that the insurance cartier has offered to settle a claim, then Lender may coHect the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay sums secured by this Security Instrument, whether or not then due. The 30-day period will begin when the notice is given. Unless Lender and Borrower otherwise agree in writing. any application of proceeds to principal shall not ex.tend or postpone the due date of the monthly payments referred to iri paragraphs 1 and 2 or change the amount of the payments. If under paragraph 21 the Property is acquired by Lender. Borrower's rightto any ir:sura!lce policies and proceeds resulting from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security Instrument immediately prior to the acquisition. 6. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application; Lea~cholds. Borrower shall occupy, establish. and use the Property as Borrower's principal residence within sixty days after the ex.ecution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld. or unless extenuating circumstances exist which are beyond Borrower's control. Borrower shall not destroy. damage or impair the Property. allow the Property to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal. is begun that in Lender's good faith judgment could result in forfeiture of the Property or otherwise materia!!y impair the lien created by this Security Instrument or Lender's. security interest. Borrower may cure such a default and reinstate, as provided in paragraph 18. by causing the action or proceeding to be dismissed with a ruling that. in Lender's good faith determination, precludes forfeiture of the Borrower's interest in the Property or other material impairment of the lien created by this Security Instrument or Lender's security interest. Borrower shall also be in default if Borrower. during the loan application process, gave materially false or inaccurate infonnation or statements to Lender (or failed to provide Lender with any material information) in connection with the loan evidenced by the Note. including. but not limited to, representations concerning Borrower's occupancy of the Property as a principal residence. If this Security Instnllnent is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee title to the Property. the leasehold and the fte title shall not merge unless Lender agrees to the merger in writing. 7. Protection of Lender's Rights in the Property, If Borrower fails to perform the covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights in the Property (such as a proceeding in bankruptcy, probate. for condemnation or forfeiture or to enforce laws or regulations). then Lender may do and pay for whatever is necessary to protect the value of the Property ami Lender's rights in the Property. Lender's llctions may include p,lying any sums secured h:, a lien which has priority over this Security Instrument. appearing in court. paying reasonable attorneys' fees and entering on the Property to make repairs. Although Lender may take action undn this p:lragraph 7, Lender docs not have to do so. Any amounts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this Security Instrument. Unless Borrower and Lender agree to other terms of payment. these amounts shall bear interest from the date of disbursement at the Note rate and shad be payable, with interest. upon notice from Lender to Borrower requesting payment. R. l\'lortgage Insurance. If Lender required mortgage insurance as a condition of making the loan secured by this Security Instrument. Borrower ~,hall pay the premiums required to maintain the mortgage insurance in effect. If. for any rcason. the mortgage insurance coverage required by Lender lapses or ceases to be in effect, Borrower shall pay the premiums required to obtain coverage substantially equivalent to the mortgage insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the mortgage insurance previously incffect, from an alternate mortgage insurer approved by Lender. If suhstantiaily equivalent mortgage insurance coverage is not available. Borrower shall pay to Lender each month a sum equal to (me-twelfth of the yearly mortgage insurance premiu'TI being paid by Borrower when the insurance coverage lapsed or ceased to be in effect. Lcnc{er will accept, use and retain the:,e payments as a loss reserve in lieu of mortgage insurance. Loss reserve Form 3028 9/90 Pago 3 01 6