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200610952 Loan No.: 1000270907 FIXED/ADJUSTABLE RATE/ BALLOON RIDER (LIBOR Six-Month Index (As Published In The Wall Street Journal}-Rate Caps) THIS FIXED/ADJUSTABLE RATE/BALLOON RIDER is made this 8th day of December, 2006, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned ("Borrower") to secure Borrower's Fixed/Adjustable Rate Balloon Note (the "Note") to MERITAGE MORTGAGE CORPORATION ("Lender") of the same date and covering the property described in the Security Instrument and located at: 4306 WEST 13TH STREET, GRAND ISLAND, NE 68803 [Property Address] THE NOTE PROVIDES FOR A CHANGE IN BORROWER'S FIXED INTEREST RATE TO AN ADJUSTABLE INTEREST RATE. THE NOTE LIMITS THE AMOUNT BORROWER'S ADJUSTABLE INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE BORROWER MUST PAY. THIS NOTE IS PAYABLE IN FULL AT MATURITY. YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE NOTE AND UNPAID INTEREST THEN DUE. LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THAT YOU MAY OWN, OR YOU WILL HAVE TO FIND A LENDER, WHICH MAY BE THE LENDER YOU HAVE THIS NOTE WITH, WILLING TO LEND YOU THE MONEY. IF YOU REFINANCE THIS NOTE AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW NOTE EVEN IF YOU OBTAIN REFINANCING FROM THE SAME LENDER. ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. ADJUSTABLE RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial fixed interest rate of 9.875%. The Note also provides for a change in the initial fixed rate to an adjustable interest rate, as follows: 4. ADJUSTABLE INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Interest Change Dates The fixed interest rate I pay may change on the first day of January, 2009 and on that day every 6th month thereafter. Each date on which my interest rate could change, is called an "Interest Change Date." (B) The Index Beginning with the first Interest Change Date, my interest rate will be based on an Index. The "Index" is the average of interbank offered rates for six-month U.S. dollar-denominated deposits in the London market ("USOR"), as published in The Wall Street Journal. The most recent Index figure available as of the first business day of the month immediately preceding the month in which the Interest Change Date occurs is called the "Current Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice ofthis choice. Fixed/Adjustable Rate Balloon Rider - WSJ Six Month LIBOR Meritage Mortgage Corporation Page 10f3 IIC 54205.6 20443MU 07105 IIIIIIIIIIIIIIIIIIIIIIIIII~IIIIIIII~IIIIIIIII 100 0 Z 7 090 7