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<br />200700328 <br /> <br />BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and <br />convey the Property and that the Propeliy is unencumbered, except for encumbrances of record. Borrower warrants and will <br />defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. <br /> <br />THIS SECURITY INSTRUMENT comhines uniform covenants for national use and non-uniform covenants with limited <br />variations by jurisdiction to constitute a uniform security instrument covering real property. <br /> <br />UNIFORM COVENANTS. Borrower and I,ender covenant and agree as follows: <br /> <br />1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due <br />the principal of, and interest on, the debt evidcnced by the Note and any prepayment charges and late charges due under the <br />Note. Borrower shall also pay funds for Escrow Hems pursuant to Section 3. Payments due under the Note and this Security <br />Instrument shall bc made in U.S. currency. Ilowever, if any check or other instrument received by Lender as payment under <br />the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments <br />due under the Note and this Security Instrument be made in one or more of the following furms, as selected by I,ender: (a) <br />cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn <br />upon an institution whose deposits arc insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds <br />Transfer. <br /> <br />Payments arc deemed received hy Lender when received at the location designated in the Note or at such other location <br />as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may return any payment or <br />partial payment if the payment or partial payments are insuflicient to bring the Loan current. Lender may accept any payment <br />or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to <br />refuse such payment or paliial payments in the future, hut I,ender is not obligated to apply such payments at the time such <br />payments are accepted. I f each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on <br />unapplied funds. Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower <br />does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not <br />applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreelosure. <br />No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making <br />payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this <br />Security Instrument. <br /> <br />2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments accepted and <br />applied hy Lender shall be applied in the following order of priority: (a) interest due under the Note; (h) principal due under the <br />Note; (c) amounts due under Section 3. Such payments shall he applied to each Periodic Payment in the order in which it <br />became due. Any remaining amounts shall be applied first to late charges, second to any other amounts due under this <br />Security Instrument, and then to reduce the principal halance of the Note. <br /> <br />If Lender receives a payment from Borrower for a delinquent Periodie Payment which includes a sufficient amount to pay <br />any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic <br />Payment is outstanding, Lender may apply any payment received from Borrower to the repayment ofthe Periodic Payments if. <br />and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the <br />full payment of one or more Periodic Payments, such excess may be applied to any late charges dUe. Voluntary prepayments <br />shall he applied first to any prepayment charges and then as described in the Note. <br /> <br />Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not <br />extend or postpone the due date, or change the amount, of the Periodic Payments. <br /> <br />3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, until the <br />Note is paid in full, a sum (the "Funds") to provide for payment of amounts due for: (a) taxes and assessments and other items <br />which can attain priority over this Security Instrument as a lien or encumbrance on the Property; (b) leasehold payments or <br />ground rents on the Property, if any; (c) premiums for any and all insurance required by J,ender under Section 5; <br /> <br />Initials f) ~ b... Jd <br /> <br />_ .6A(NE) (0407)01 <br />(!> <br />DDS-NET <br /> <br />Page 4 of 15 <br /> <br />Form 3028 1/01 <br />