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200411322 Borrower covenants that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property, and that the Property is unencumbered, except for encumbrances of record. `Borrower covenants that Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to encumbrances of record. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal and Interest. Borrower shall promptly pay when due the principal and interest indebtedness evidenced by the Note and late charges as provided in the Note. 2. Funds for Taxes and Insurance. Subject to applicable law or a written waiver by Lender, Borrower shall pay to Lender on the day monthly payments of principal and interest are payable under the Note, until the Note is paid in full, a sum (herein "Funds ") equal to one - twelfth of the yearly taxes and assessments (including condominium and planned unit development assessments, if any) which may attain priority over this Deed of Trust, and ground rents on the Property, if any, plus one - twelfth of yearly premium installments for hazard insurance, plus one - twelfth of yearly premium installments for mortgage insurance, if any, all as reasonably estimated initially and from time to time by Lender on the basis of assessments and bills and reasonable estimates thereof. Borrower shall not be obligated to make such payments of Funds to Lender to the extent that Borrower makes such payments to the holder of a prior mortgage or deed of trust if such holder is an institutional lender. If Borrower pays Funds to Lender, the Funds shall be held in an institution the deposits or accounts of which are insured or guaranteed by a federal or state agency (including Lender if Lender is such an institution). Lender shall apply the Funds to pay said taxes, assessments, insurance premiums and ground rents. Lender may not charge for so holding and applying the Funds, analyzing said account or verifying and compiling said assessments and bills, unless Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. Borrower and Lender may agree in writing at the time of execution of this Deed of Trust that interest on the Funds shall be paid to Borrower, and unless such agreement is made or applicable law requires such interest to be paid, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Lender shall give to Borrower, without charge, an annual accounting of the Funds showing credits and debits to the Funds and the purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the sums secured by this Deed of Trust. If the amount of the Funds held by Lender, together with the future monthly installments of Funds payable prior to the due dates of taxes, assessments, insurance premiums and ground rents, shall exceed the amount required to pay said taxes, assessments, insurance premiums and ground rents as they fall due, such excess shall be, at Borrower's option, either promptly repaid to Borrower or credited to Borrower on monthly installments of Funds. If the amount of the Funds held by Lender shall not be sufficient to pay taxes, assessments, insurance premiums and ground rents as they fall due, Borrower shall pay to Lender any amount necessary to make up the deficiency in one or more payments as Lender may require. Upon payment in full of all sums secured by this Deed of Trust, Lender shall promptly refund to Borrower any Funds held by Lender. If under paragraph 17 hereof the Property is sold or the Property is otherwise acquired by Lender, Lender shall apply, no later than immediately prior to the sale of the Property or its acquisition by Lender, any Funds held by Lender at the time of application as a credit against the sums secured by this Deed of Trust. 3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under the Note and paragraphs 1 and 2 hereof shall be applied by Lender first in payment of amounts payable to Lender by Borrower under paragraph 2 hereof, then to interest payable on the Note, and then to the principal of the Note. 4. Prior Mortgages and Deeds of Trust; Charges; Liens. Borrower shall perform all of Borrower's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust, including Borrower's covenants to make payments when due. Borrower shall pay or cause to be paid all taxes, assessments and other charges, fines and impositions attributable to the Property which may attain a priority over this Deed of Trust, and leasehold payments or ground rents, if any. 5. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included in the term "extended coverage" and any other hazards, for which Lender requires insurance, including, but not limited to, floods or flooding, earthquakes or hurricanes (whether or not such hazards are required to be insured against at the time the Loan is made). All insurance required by Lender shall be maintained in the amounts and for the periods that Lender requires. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval, which shall not be unreasonably withheld. In the event the Property improvements are now, or at any time during the term of this Security Instrument are determined to be, in a Special Flood Hazard Area, Borrower must obtain and maintain flood insurance. Borrower acknowledges and agrees that failure to insure the Property, which is the security for this agreement, according to the terms and conditions of this paragraph 5 is an event of default subject to the remedies available to Lender under this agreement. If Borrower fails to obtain or maintain any coverage described herein, Lender may, but shall have no duty to, obtain such coverage or substantially equivalent coverage with an insurance carrier of Lender's choice, protecting only Lender's interest in the Property in accordance with paragraph 7, all at Borrower's expense. Lender shall have no duty or obligation to obtain any insurance protecting Borrower's interest in the Property, or covering risks for which Lender has not required insurance, as described in the first paragraph of this paragraph 5, even if Borrower has previously obtained or maintained such insurance coverage, including, without limitation, a homeowners policy. Lender may, in its sole discretion, obtain insurance in whatever amounts and types Lender deems adequate to protect Lender's interest in the Property, regardless of the unpaid balance remaining under the Note or the amounts remaining due under this Security Instrument. For this purpose, Lender will deem its interests to be adequately protected by an insurance policy with coverage equal to the value of the improvements located on the Property securing Borrower's loan. Lender may determine the value of the improvements by assuming as accurate the value assigned to the improvements in the insurance policy that Lender's records reflect was most recently held by Borrower prior to the insurance policy obtained by Lender. Borrower acknowledges and agrees the amount may not be equal to the actual value or replacement value of the improvements, and any such insurance Lender obtains may not protect Borrower's interest in the Property. Borrower acknowledges and agrees that the cost of the insurance coverage so obtained by Lender may significantly exceed the cost of insurance Borrower could have obtained, as described in the first paragraph of this paragraph 5, if Borrower had purchased the insurance directly, and further may provide Borrower with less or no insurance coverage protecting Borrower's interest in the Property. Borrower further acknowledges and agrees that Lender may obtain any such insurance directly or through an insurance agency or insurer affiliated with Lender and Lender or Lender's affiliate may receive a commission or other compensation in connection with obtaining such insurance. Form 3828 3/98 (Page 2 of 5 Pages)