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<br />200704840
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<br />BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to
<br />grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower
<br />warrants and will defend generally the title to the Property against all claims and demands, subject to any
<br />encumbrances of record.
<br />THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with
<br />limited variations by jurisdiction to constitute a uniform security instrument covering real property.
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<br />UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:
<br />1. Payment of Principal and Interest; Prepayment and Late Charges. Borrower shall promptly pay when
<br />due the principal of and interest on the debt evidenced by the Note and any prepayment and late charges due under
<br />the Note.
<br />2. Funds for Taxes and Insurance. Subject to applicable law or to a written waiver by Lender, Borrower shall
<br />pay to Lender on the day monthly payments are due under the Note, until the Note is paid in full, a sum ("Funds")
<br />for: (a) yearly taxes and assessments which may attain priority over this Security Instrument as a lien on the
<br />Property; (b) yearly leasehold payments or ground rents on the Property. if any; (c) yearly hazard or property
<br />insurance premiums; (d) yearly flood insurance premiums, if any; (e) yearly mortgage insurance premiums, if any;
<br />and (d) any sums payable by Borrower to Lender, in accordance with the provisions of paragraph 8, in lieu of the
<br />payment of mortgage insurance premiums. These items are called "Escrow Items." Lender may, at any time, collect
<br />and hold Funds in an amount not to exceed the maximum amount a lender for a federally related mortgage loan may
<br />require for Borrower's escrow account under the federal Real Estate Settlement Procedures Act of 1974 as amended
<br />from time to time, 12 U.S.c. Section 2601 et seq. ("RESPA"), unless another law that applies to the Funds sets a
<br />lesser amount. If so, Lender may. at any time, collect and hold Funds in an amount not to exceed the lesser amount.
<br />Lender may estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures
<br />of future Escrow Items or otherwise in accordance with applicable law.
<br />The Funds shall be held in an institution whose deposits arc insured by a federal agency, instrumentality, or
<br />entity (including Lender, if Lender is such an institution) or in any Federal Homc Loan Bank. Lender shall apply the
<br />Funds to pay the Escrow Items. Lender may not charge Borrower for holding and applying the Funds. annually
<br />analyzing the escrow account, or verifYing the Escrow Items, unless Lender pays Borrower interest on the Funds
<br />and applicable law permits Lender to make such a charge. However, Lender may require Borrower to pay a one-
<br />time charge for an independent real estate tax reporting service used by Lender in connection with this loan, unless
<br />applicable law provides otherwise. Unless an agreement is made or applicable law requires interest to be paid,
<br />Lcndcr shall not be requircd to pay Borrower any interest or earnings on the Funds. Borrowcr and Lender may agree
<br />in writing, however, that interest shall be paid on the Funds. Lender shall give to Borrower, without charge, an
<br />annual accounting of the funds, showing credits and debits to the Funds and the purpose for whieh each debit to the
<br />funds was made. The Funds are pledged as additional security for all sums secured by this Security Instrument.
<br />If the funds held by Lender exceed the amounts permitted to be held by applicable law, Lender shall account to
<br />Borrower for the excess Funds in accordance with the requirements of applicable law. If the amount ofthe Funds
<br />held by Lender at any time is not sufficient to pay the Escrow Items when due, Lender may so notifY Borrower in
<br />writing, and, in such case Borrower shall pay to Lender the amount necessary to make up the deficicney. Borrower
<br />shall make up the deficiency in no more than twelve monthly payments, at Lender's sole discretion.
<br />Upon payment in full of all sums sccured by this Security Instrument, Lender shall promptly refund to
<br />Borrower any Funds held by Lender. If, under paragraph 21, Lender shall acquire or sell the Property, Lender, prior
<br />to the acquisition or sale ofthe Property, shall apply any Funds held by Lender at the time of acquisition or sale as a
<br />credit against the sums secured by this Security Instrument.
<br />3. Application of Payments. Unless applicable law provides otherwise, all payments received by
<br />Lender under paragraphs 1 and 2 shall be applied: first, to any prepayment charges due under the Note;
<br />second, to amounts payable under paragraph 2; third, to interest due; fourth, to principal due, and last, to
<br />any late charges due under the Note.
<br />4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the
<br />Property which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any.
<br />Borrower shall pay these obligations in the manner provided in paragraph 2, or if not paid in that manner;Z. Bo. rr wer
<br />SEE PAGES 1,3,4,5, 6 AND 7 FOR ADDITIONAL IMPORTANT TERMS1 )0 .'~
<br />204643206/05/07 17:01 PRICE MITCHELL InztllllM X .77 {/ _ '
<br />72-41148 ":,,, pa* 2 {7
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