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<br />200700802
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<br />The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including
<br />Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank. Lender shall apply the Funds to
<br />pay the Escrow Items no later than the time specified under RE:SPA. Lender shall not charge Borrower for holding and applying the
<br />Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and
<br />Applicable Law permits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to
<br />be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can
<br />agree in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an annual
<br />accounting of the Funds as required by RESPA.
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<br />If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall account to Borrower for the excess funds in
<br />accordance with RESPA. If there is a shortage of Funds held in escrow, as defined under RESPA, Lender shall notify Borrower as
<br />required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the shortage in accordance with RESPA, but
<br />in no more than until Lender's monthly payments. If there is a deficiency of Funds held in escrow, as defined under RESPA, Lender
<br />shall notify Borrower as required by RESPA and Borrower shall pay to Lender the amount necessary to make up the deficiency in
<br />accordance with RESPA, but in no more than until Lender's monthly payments.
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<br />Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held
<br />by Lender.
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<br />4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property
<br />which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any, and Community
<br />Association Dues, Fees, and Assessments, if any. To the extent that these items are Escrow Items, Borrower shall pay them in the
<br />manner provided in Section 3.
<br />Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in
<br />writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is
<br />performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings
<br />which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such
<br />proceedinQs are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to
<br />this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority over this
<br />Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given,
<br />Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 4.
<br />Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender
<br />in connection with this Loan.
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<br />5. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured
<br />against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to,
<br />earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including
<br />deductible levels) and for the [)eriods that Lender requires. What Lender requires pursuant to the preceding sentences can change
<br />during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to
<br />disapprove Borrower's choice, which right shall not be exercised unreasonably'. Lender may require Borrower to pay, in connection
<br />with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge
<br />for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur
<br />which reasonably might affect such determination or certification Borrower shall also be responsible for the payment of any fees
<br />imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting
<br />from an objection by Borrower.
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<br />If Borrower fails to maintain any of the coverages described above, Lender may obtain insurance coverage, at Lender's option
<br />and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such
<br />coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the
<br />Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower
<br />acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower
<br />could have obtained. Any amounts disbursed by Lender under this Section 5 shall become additional debt of Borrower secured by
<br />this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with
<br />such interest, upon notice from Lender to Borrower requesting payment.
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<br />All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such
<br />policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender
<br />shall have the right to hold the Folicies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts
<br />of paid premiums and renewa notices. If Borrower obtains any form of insurance coverage, not otherWise required by Lender, for
<br />damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as
<br />mortgagee and/or as an additional loss payee.
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<br />In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if
<br />not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the
<br />underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is
<br />economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to
<br />hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed
<br />to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs
<br />and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in
<br />writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any
<br />interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of
<br />the insurance proceeds and shall be the sole obligation of Borrower If the restoration or repair is not economically feasible or
<br />Lender's security would be lessened, the insurance proceeds shall De applied to the sums secured by this Security Instrument,
<br />whether or not then due, with the excess, if any, paid to the Borrower Such insurance proceeds shall be applied in the order
<br />provided for in Section 2.
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<br />If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If
<br />Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender
<br />may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the
<br />Property under Section 22 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an
<br />amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other
<br />than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as
<br />such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the
<br />Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due.
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<br />6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days
<br />after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least
<br />one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or
<br />unless extenuating circumstances exist which are beyond Borrower's control.
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<br />7. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or
<br />impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the
<br />Property, Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its
<br />condition. Unless it is determined pursuant to Section 5 that repair or restoration is not economically feasible, Borrower shall
<br />promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in
<br />connection with damage to, or the taking of, the Property, Borrower shall .be responsible for repairing or restoring the Property only if
<br />Lender has released proceeds for such purposes. Lender may disburse rroceeds for the repairs and restoration in a single payment
<br />or in a series of progress payments as the work is completed. If the irll:;urance or condemnation proceeds are not sufficient to repair
<br />or restore the Property, Borrower Is not relieved of Borrower's obligation tor the complellon of such repair or r85toraIl0n*')1
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<br />3028 NE DOT 01/01 PG3
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