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86-- 10196!),
<br />requires interest to be paid, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Lender
<br />shall give to borrower, without charge, an annual accounting of the Funds showing credits and debits to the Funds and the
<br />purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the sums secured by
<br />this Security Instrument.
<br />(� If the amount of the Funds held by Lender, together with the future monthly payments of Funds payable prior to
<br />( the due dates of the escrow items, shall exceed the amount required to pay the escrow items when due, the excess shall be,
<br />at Borrower's option, either promptly repaid to Borrower or credited to Borrower on monthly payments of Funds. If the
<br />amount of the Funds held by Lender is not sufficient to pay the escrow items when due, Borrower shall pay to Lender any
<br />amount necessary to make tip the deficiency in one or more payments as required by Lender.
<br />Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower
<br />any Funds held by Lender. If under paragraph 19 the Property is sold or acquired by Lender, Lender shall apply, no later
<br />than immediately prior to the sale of the Property or its acquisition by Lender, any Funds held by Lender at the time of
<br />application as a credit against the sums secured by this Security instrument.
<br />3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under
<br />paragraphs I and 2 shalt be applied: first, to late charges due under the Note; second, to prepayment charges due under the
<br />Note; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due.
<br />t. 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, Borrower shall
<br />pay them on time directly to the person owed payment. Borrower shall promptly furnish to Lender all notices of amounts
<br />to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to Lender
<br />receipts evidencing the payments.
<br />Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a)
<br />agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good
<br />faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to
<br />prevent the enforcement of the lien or forfeiture of any part of the Property; 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 part of
<br />the Property is subject to a lien which may attain priority over this Security Instrument, Lender may give Borrower a
<br />notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days
<br />of the giving of notice
<br />5. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property
<br />insured against loss by fire, hazards included within the term "extended coverage" and any other hazards for which Lender
<br />requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The
<br />insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not he
<br />unreasonably withheld.
<br />All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause.
<br />Lender shall have the right to hold the policies and renewals. If Lender requires, Borrower shall promptly give to Lender
<br />all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance
<br />carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.
<br />Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair
<br />of the Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the
<br />restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be
<br />applied to the sums secured by this Security Instrument, whether or not then due• with any excess paid to Borrower. if
<br />Borrower abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier has
<br />offered to settle a claim, then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore
<br />the Property or to pay sums secured by this Security Instrument. whether or not then due. The 30 -day period will begin
<br />when the notice is given.
<br />Unless Lender and Borrower otherwise agree in writing, any application ot'prcxeeds to principal shall not extend or
<br />postpone the due date of the monthly payments referred to in paragraphs i and 2 or change the amount of the payments. If
<br />under paragraph 19 the Property is acquired by Lender, Borrower's right to any insurance policies arid proceeds resulting
<br />from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security
<br />Instrument immediately pror to the acquisition.
<br />5. Preservation and Maintenance of Property; Leaseholds. Burrower shall not destroy. damage or substantially
<br />change the Property, allow the Property to deteriorate or commit waste. If this Security Instrument is on a leasehold.
<br />Borrower shall comply with the provisions of the lease, and if Burrower acquires f(-v title to the property. the leasehold
<br />and fee title shall rut merge until Lender agrees to the merger in writing;.
<br />7. Protection of Lender's Rights in the Property; Mortgage Insurance. If Borrower tails to perform the
<br />covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights tit the Property (such as a proceeding in bankruptcy, probate, for condemnation or to enforce laws or
<br />regulations). then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender's rights
<br />in the Property. Lender's actions may include paying any sums secured by a lien which has priority o,'cr this Security
<br />Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although
<br />Lender may take action under this paragraph 7, Lender does not have to do so.
<br />Any amounts disbursed by Lender under this paragraph 7 shall become additional Licht of Borrower secured by this
<br />Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from
<br />the date of disbursement at the Note rate and shall he payable, with interest, upon notice from Lender to Borrower
<br />requesting payment.
<br />if Lender required mortgage insurance as a condition of making the loan secured by this Security Instrument,
<br />Borrower shall pay the premiums required to maintain the insurance in effect until such time as rile requirement for the
<br />insurance terminates in accordance with Borrower's and Lender's written agreement or applicable law.
<br />S. Inspection. Lender or its agent may make reasonable entries upon and inspections of the Property. Lender
<br />shall give Borrower notice at the time ofor prior to an inspection specifying reasonable cause for the inspection.
<br />9, Condemnation. The proceeds ofany award or claim for damages, direvi or c•onsequenual, in connection with
<br />any condemnation or other taking of any part of the Property, or for conveyance in hell of condemnation, are herchy
<br />( asargned and shall be. paid to tender. 'iris,
<br />L- in the event of a total taking of the Property, the prdkteds shall to applied to file sums secured by tea Security
<br />Instrument, whether or not then due, until any excess paid to Borrower. In the event of a partial taking of the Prolx•rty, r-,
<br />a
<br />unless }ta +rmwrr and Lender e +thetw'ise agree m writing, tier sum•. serurecS by this Secunly pnslrumcnt .hail t *r n•duccd by ��
<br />the amount of the proceeds niUltiplied hy' the 1i+11owing fraction (it) flrc total amount of the sums secured tniniedimch
<br />before the taking,, divided by ibl Ute fair market value of Ihe. Pre+pa rt inimcchateh heforc the taking Inv htlan: ; shall fkr
<br />paid to Hotmwer
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