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12. Lien Status. (a) Modification. Borrower agrees to extend this Security Instrument in accordance with this Paragraph 12(a). If Lender determines that the original lien status of the Security Tnstrument is jeopardized under state law (including but not limited to situations where the amount secured by the Security Instrument equals or excccds the maximum principal amount stated or the maximum pcriod under which loan advances retain the same lien priority initially granted to loan advances has cxpircd) and state law permits the original lien status to be maintained for future loan advances through the execution and recordation of one or more documents, then Lender shall obtain title evidcncc at Borrower's expense. Tfthe title evidence indicates that thc Propcrty is not encumbered by any liens (except the First Security Instrument dcscribed in Paragraph 13(a), this Second Security Instrument and any subordinate liens that thc Lcnder determines will also be subordinate to any future loan advanccs), Lender shall request the Borrower to execute any documcnts nccessary to protect the lien status of future loan advances. Borrower agrces to executc such documents. If state law does not permit the original lien status to be extended to future loan advances, Borrowcr will bc deemed to have failed to have performed an obligation under this Security Instrument. (b) Tax Deferral Programs. Borrower shall not participate in a real estate tax deferral program, if any liens created by the tax deferral are not subordinate to this Security Instrument. (c) Prior Liens. Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acccptable 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 prcvent the enforcement of the lien or forfeiture of any part of the Property; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to all amounts secured by 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 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. 13. Relationship to First Security Instrument. (a) Second Security Instrument. In order to secure payments which thc Sccretary may make to or on behalf of Borrower pursuant to Section 255(i)( I )(A) of the National Housing Act and the Loan Agreement, the Secretary has required Borrower to execute a Second Note and this Second Security Instrument. Borrower also has executed a First Note and First Security Instrument. (b) Relationship of First and Second Security Instruments. Payments made by the Secrctary shall not be included in the debt under the First Note unless: (i) The First Security Instrument is assigncd to the Secretary; or (ii) The Secretary accepts reimbursement by the holder of the First Note for all payments made by the Secretary. I f the circumstances described in (i) or (ii) occur, thcn all payments by the Secretary, including interest on the payments, but excluding latc charges paid by the Secretary, shall be included in the dcbt under the First Note. (c) Effect on Borrower. Where there is no assignment or reimbursement as described in (b)(i) or (ii) and thc Secrctary makes payments to Borrower, then Borrower shall not: (i) Be required to pay amounts owed under thc First Note, or pay any rents and revenues of the Property under Paragraph 19 to the holder of the First Note or a receiver of the Property, until the Secretary has required payment in full of all outstanding principal and accrued interest under the Second Note; or (ii) Be obligatcd to pay interest or shared appreciation under the First Note at any time, whether accrued before or after the payments by the Secrctary, and whether or not accrued interest has been included in the principal balance under the First Note. (d) No Duty of the Secretary. The Secretary has no duty to the holder of the First Note to enforce covenants of the Second Security Instrument or to take actions to preservc the value of the Property, even though the holder of the First Note may be unable to collect amounts owed under the First Note because of restrictions in this Paragraph 13. 15XA: 11/96 JJM Page 5 200703611 ~