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<br />200710068
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<br />CASE #: NE3212493409703 DOC ID #: 00018300321611007
<br />Second, to any taxes, special assessment<;, leasehold payments or ground rents, and fire, flood and other
<br />hazard insurance premiums, as required;
<br />Third, to interest due under the Note;
<br />Fourth, to amortization of the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property,
<br />whether now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire,
<br />for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that
<br />Lender requires. Borrower shall also insure all improvements on the Property, whether now in existence or
<br />subsequently erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried
<br />with companies approved by Lender. The insurance policies and any renewals shall be held by Lender and shall
<br />include loss payable clauses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if
<br />not made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make
<br />payment for such loss directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the
<br />insurance proceeds may be applied by Lender, at it<; option, either (a) to the reduction of the indebtedness under the
<br />Note and this Security Instrument, first to any delinquent amount<; applied in the order in paragraph 3, and then to
<br />prepayment of principal, or (b) to the restoration or repair of the damaged Property. Any application of the proceeds
<br />to the principal shall not extend or postpone the due date of the monthly payments which are referred to in
<br />paragraph 2, or change the amount of such payments. Any excess insurance proceeds over an amount required to
<br />pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally
<br />entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer of title to the Property that extinguishes
<br />the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the
<br />purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan
<br />Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence
<br />within sixty days after the execution of this Security Instrument (or within sixty days of a later sale or transfer of the
<br />Property) and shall continue to occupy the Property a<; Borrower's principal residence for at least one year after the
<br />date of occupancy, unless Lender determines that requirement will cause undue hardship for Borrower, or unless
<br />extenuating circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any
<br />extenuating circumstances. Borrower shall not commit waste or destroy, damage or substantially change the
<br />Property or allow the Property to deteriorate, reasonable wear and tear excepted. Lender may inspect the Property if
<br />the Property is vacant or abandoned or the loan is in default. Lender may take rea<;onable action to protect and
<br />preserve such vacant or abandoned Property. Borrower shall also be in defaull if Borrower, during the loan
<br />application process, gave materially false or inaccurate information or statements to Lender (or failed to provide
<br />Lender with any material information) in connection with the loan evidenced by the Note, including, but not limited
<br />to, representations concerning Borrower's occupancy of the Property a,> a principal residence. If this Security
<br />Instrument is on a lea,>ehold, Borrower shall comply with the provisions of the lease. If Borrower acquires fee title
<br />to the Property, the lea,>ehold and fee title shall not be merged unless Lender agrees to the merger in writing.
<br />6. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection
<br />with any condemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are
<br />hereby assigned and shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid
<br />under the Note and this Security Instrument. Lender shall apply such proceeds to the reduction of the indebtedness
<br />under the Note and this Security Instrument, first to any delinquent amounts applied in the order provided in
<br />paragraph 3, and then to prepayment of principal. Any application of the proceeds to the principal shall not extend
<br />or postpone the due date of the monthly payments, which are referred to in paragraph 2, or change the amount of
<br />such payment,>. Any excess proceeds over an amount required to pay all out,>tanding indebtedness under the Note
<br />and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />7. Charges to Borrower and Protection of Lender's Rights in the Property. Borrower shall pay all
<br />governmental or municipal charges, fines and impositions that are not included in paragraph 2. Borrower shall pay
<br />these obligations on time directly to the entity which is owed the payment. If failure to pay would adversely affect
<br />Lender's interest in the Property, upon Lender's request Borrower shall promptly furnish to Lender receipts
<br />evidencing these payment,>.
<br />If Borrower fails to make these payments or the payments required by paragraph 2, or fails to perform any
<br />other covenant,> and agreement'> contained in this Security Instrument, or there is a legal proceeding that may
<br />significantly affect Lender's right,> in the Property (such as a proceeding in bankruplcy, for condemnation or to
<br />enforce laws or regulations), then Lender may do and pay whatever is necessary to protect the value of the Property
<br />and Lender's right,> in the Property, including payment of taxes, hazard insurance and other items mentioned in
<br />paragraph 2.
<br />Any amounts disbursed by Lender under this paragraph shall become an additional debt of Borrower and be
<br />secured by this Security Instrument. These amount,> shall bear interest from the date of disbursement, at the Note
<br />rate, and at the option of Lender, shall be immediately due and payable.
<br />Borrower shall promptly discharge any lien which ha<; priority over this Security Instrument unless Borrower:
<br />(a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b)
<br />contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the
<br />Lender's opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an
<br />agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any
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<br /><all.4N(NE) (0407)
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<br />CHL (09/05)
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