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200603858 Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: lal agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to lender; (b) contests in good faith the lien by, or dafends against enforcement of the lien in, legal proceedings which in the lender's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to lender subordinating the lien to this Security Instrument. If lender determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, lender may give Borrowar a notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days of the giving of notice. 5. Hazard or Property Insurance. Borrower shall keap the improvements now existing or hereafter erectad on the Property insured against loss by fire, hazards included within the term "extanded coverage" and any other hazards, including floods or flooding, for which lender raquires insurance. This insurance 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. 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 mortgaga clausa. lender shall have the right to hold the policies and renewals. If lender requiras, Borrower shall promptly give to lender all receipts of paid premiums and renewal notices. In the avent of loss, Borrower shall give prompt notica to the insurance carrier and lender. lender may make proof of loss if not made promptly by Borrower. Unless lend8r and Borrower otherwise agree in writing, insurance proc8eds 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 proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with any 8xcess paid to Borrower. If Borrower abandons the Property, or does not answer within the number of days prescribed by applicable law as set forth in a notice from lender to Borrower that the insurance carrier has offer8d to settle a claim, then lender may collect 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 period of time for Borrower to answer es set forth in the notice will begin when the notice is given. Unless lender and Borrower otherwise agree in writing, any epplicetion of proceeds to principal shall not extend or postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If under paragraph 21 the Property is acquired by lender, Borrower's right to any insurance 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. Preservation. Maintanance and Protection of the Property; Borrower's loan Application; Leaseholds. Borrower shall not destroy, demage or impair the Property, allow the Property to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture ection or proceeding, whether civil or criminal. is begun that in lender's good faith judgment could result in forfeiture of the Property or otherwise materielly impair the lien created by this Security Instrument or lender's security interest. Borrower mey 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 felse or inaccurate information or statements to lender lor failed to provide lender with any materiel information) in connection with the loen evidenced by the Note. If this Security Instrument is on a leesehold, Borrower shall comply with all the provisions of the lease. If Borrower ecquires fee title to the Property, the leasehold and the fee title shall not merge unless lender agrees to the merg8r in writing. 7. Protection of L8nder's Rights in the Property. If Borrower fails to perform the covenants and agreements contained in this S8curity Instrument. or there is a legal proc88ding that mey significantly affect lender's rights in the Property (such as a proceeding in bankruptcy, probate, for condamnation or forfeiture or to enforce laws or r8gulations), then lender may do and pay for whetever is necessary to protect the value of th8 Property and lender's rights in the Property. lender's actions may include paying any sums s8cured by a li8n which has priority over this Security Instrument, appearing in court. paying reasonable attorneys' fees and entering on the Property to make repairs. Although lender mey teke action under this peragraph 7, lender does not have to do so. Any amounts disbursad by lander under this paragraph 7 shall b8com8 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 shall be payable, with interest, upon notice from lender to Borrower requesting payment. By initialing, I acknowledge this is page 3 of 7 of the Deed of Trust. ~ Copyright Compli.nco Sy.tom..lnc. 1993. 1994. 1995. 1~97. 2004 ITEM 121NEL3 104081 P.g.3 of 7 Initials Initials www.compliancIll$V.!ltBms.cnm 800.988.8522 Fn 818.958.1888