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I , UNIFORM COVENANTS. Horrower and Lender covenant and agrce as follows: I. Payment of Principal and Interest; "repayment and Late Charges, Borrowcr shall promptly pay when due the principal of and interest onlhe debt evidenced by the Note and any prepayment and late charges due under the Note. 2. Funds for Taxes and Insurance, Subject to applicable law or to" wrilten waiver by Lender, Borrower shall pay to Lender on the day monthly payments arc due under the Note, until the Note is paid in full, l\ sum ("Funds") equal to one-Iwelfth of: (a) yearly taxes and nssessments which may attain priority over this Security Instrurnent; (b) yearly leasehold payments or ground rents on lhe Property, if any; (c) yearly hazard insurance premiums; and (d) yearly mortgage insurance premiums, if any, Thcse items ure culled "escrow items." Lcnder may estimate the Funds due on the basis of current data and reusonable estimates offuturc escrow items, 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 institulion). Lender shall apply the Funds to pay the escrow items. Lender may not charge for holding and applying the Funds, analyzing the account or verifying the escrow items, unless Lender pays Horrower interest on the Funds and applicable law permits Lender to make such a charge. Borrower and Lender may agree in writing that interest shall be paid on the Funds, Unless an agreement is made or applicable law requires interest 10 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 Ihe 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 sp.cured by this Security Instrument. If the amount of the Fund~ hcld by Lemler, together with the future monthly payments of Funds payable prior to the due dates of the escrow items, shall e]o;ceed the amount required to pay the escrow items when due, the excess shall be, at Borrower's option, either promptly repaid to Borrower or credited to Borrower on monthly payments of Funds. If the amount of the Funds held by Lender is not sufficient to pay the escrow items when due, Borrower shall pay to Lender any amount necessary to make up the deficiency in one or more payments as required by Lender. Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any Funds held by Lender. If under paragraph 19 the Property is sold or acquired by Lender, Lender shall apply, no later than immediately prior to the sale of the I)roperty or its acquisition by Lender. any Funds held by Lender at the time of application as a credit against the sums secured by this Security Instrument. 3, Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under paragraphs I and 2 shall be applied' first, to late charges due under the Note; second, to prepayment charges due under the Note; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due. 4. Chargesj Liens, Borrower shall pay all taxes, assessments, charges, fines and impositions altributable to the Property which may attain priority over this Securily Instrument, and leasehold payments or ground rents, if any, Borrower shall pay these obligations in Ihe manner provided in paragraph 2, or if not paid in that manner, Borrower shall pay them on time directly to the person owed payment. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to Lender receipts evidencing the payments. Borrower shall promptly discharge any iien which has priority over this Security Instrument unless Borrower: (a) agrees in wriling 10 the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to prevcnt the enforcement of the lien or forfeilure of any part of the Property; or (e) secures from the holder of the lien an agreement satisfactory 10 Lender subordinating the lien to this Secul;ty Instrument. If Lender de~ermines that any part of lhe Property is subject to a lien which may attain priority over this Security Instrument, Lender may give Borrower 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 Insurance, Borrower shall keep the improvements now existing or hereafter erected on the Property insured l';gainstloss by fire, hazards included within the term "extended coverage" and any other hazards for which Lender reqJires 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, All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause, Lender shall have the right to hold the policies and renewals, If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices, In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof ofloss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, insurance proceeds 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 excess paid to Borrower. If Borrower abandons the Property, or does not answer within 30 days a notice from lender that the insurance carrier has offered to settle a claim, then Lender may coHect the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay sums secured by this Security InstrlJment, whether or not then due. The 3D-day period will begin when the notice is given. Unless Lender and Borrower otherwise agree in wriling, any application of proceeds to principal shall not extend or postpone the due date flf the monthly payments referred to in paragraphs I and 2 or change the amount of the payments. If under paragraph 19 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 and Maintenance of Propert)'; Leaseholds. Borrower shall not destroy, damage or substantially change the Property, allow the Property to deteriorate or commit wasle, If this Security Instrument is on a leasehold, Borrower shall comply with the provisions of the lease, and if Horrower acquires fee title to the Properly, the leasehold and fee title shall not merge unless Lender agrees to the merger in writing. 1. Protection of Lender's Rights in the Property; Mortgage Insurance. If Borrower fails to perform Ihe covenants and agreements contained in this Security Instrument, or there is "leg,,1 proceeding that may significantly affect Lender's rights in the Property {such as a proceeding in bankruptcy, probate. for condemnalion or to enforce laws or regulations), then lender may do and pay for whatever is necessary to proteclthe \'alue of the Property and Lender's rights in the Property. Lender's actions may include paying any sums secured by a lien which has priority o\'er this Secllrity Instrument, appearing in court, paying rcusonable attorneys' fees and entering on the ProperlY to make repairs. Although Lender may take action under this paragraph 1, Lender docs not have to do so. Any al110unts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this Securily Instrument. Unless Borrower and Lender agree te. other terms of payment, these amounts shall bear interest from Ihe d"II: of disbursement al the Note rale and shall be payahle, with inlerest, upon notice fH'1ll Lender 10 Borrower requC:'sling payment. If Lender required mortgage insurance as a condition of milking the loan secured by this S~'Curil}' Instrulllent. Uotr(IWer "1<111 pay Ihe premiums required 10 mainlain Ihe insurance in cITeI'I until ..uch lime as Ihe n'quiremenl ror the ifl..ur:\Il~'c tcrnulIah:s iUlI\:cordancc wllh Borrower's and Lender's written agreement or applicable law fl. In'opt'clion. Lcmler '.If lIs agenl may make r('asollahk entries upon and IIIsp~""'1l0n' of the I'ropcrl~ LCllller shall ~In: Ilmrm..er nolLce al the lime of or prim to an inspt'cliol1 'I"t-.:ifYlllg fl'asollilhlc calls(.' for I Ill' I nspl'l' I II HI 88- 101594 ,...~ ,- r.,. \ .