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86-- 105238
<br />l;1II ORM COVFNANI I, Borrower and Lender covenant and agree as follows.
<br />i. Payment of Principal and Interest; Prepayment and Late Charges. Borrower shall promptly pay u her ue
<br />the principal of and interest on the debt evidenced by the Note and any prepayment and late charges due under the No tr
<br />2. Funds for Taxes and Insurance. Suhject to applicable law or to a written waiver by Lender. Borrower shall nay
<br />to Lender on the day monthly payments are due under the Note. until the Note is paid in full, a sum t "Funds ") equal to
<br />one - twelfth o €: (a) yearly taxes and assessments which may attain priority over this Security Instrument. (bi yearly
<br />leasehold payments or ground rents on the Property, if any; (c) yearly hazard insurance premiums: and idi yearly
<br />mortgage insurance premiums, if any. These items are called "escrow items." Lender may estimate the Funds due on the
<br />basis of current data and reasonable estimates of future escrow items.
<br />The Funds shall be held in an institution the deposits or accounts of which are insured or guaranteed by a federal or
<br />state agency (including Lender if Lender is such an institution)_ Lender shall apply the Funds to pay the escrou items.
<br />Lender may not charge for holding and applying the Funds, analyzing the account or verifying the escrow- items. unless
<br />Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. Borrower and
<br />Lender may agree in writing that interest shall be paid on the Funds. Unless an agreement is made or apphcable law
<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 shoring 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 hi
<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 sny
<br />amount necessary to make up 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 14 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 1 an-- 2 sliali 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 />4, Charges; Liens. Borrower shall pay all taxes, assessments, cbarges, 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. fat
<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 par-, of
<br />the Property is subject to alien 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 Lenders approval which shall not be
<br />unreasonably withnc,d.
<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 Properly or to pay sums secured by this Security Instrument, whether or not then due The 10-day period will begin
<br />when the notice is given.
<br />Unless Lender and Borrower otherwise agree in writing, any application of proceeds 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 oft he pay men is If
<br />under paragraph 19 the Property is acquired by Lender, Borrower's right to any insurance policies and 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 Securt v
<br />Instrument immediately prior to the acquisition.
<br />5. Preservation and Maintenance of Property; Leaseholds. Borrower shall not destroy. damage or substantrally
<br />change the Property, allow the Property to deteriorate or commit waste. If this Secunty Instrument is on a leasehold.
<br />Borrower shall comply with the provisions of the tease, and if Borrower acquires fee title to the Property, the leasehold and
<br />fee title shall not merge unless Lender agrees to the mereer in writing.
<br />7. Protection of Lender's Rights in the Property; Mortgage insurance. If Borrower fails it) perform the
<br />covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect
<br />Lender's rights in 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 right,
<br />in the Property. Lender's actions may include paying any sums secured by a lien which has pnonty user this Secunn
<br />Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property ti+ male rrpairs -11th.�u,h
<br />Lender may take action under this paragraph 7. Lender does not have to do so
<br />.Any amounts disbursed by tender under this paragraph shall became additional debt of Borrower sec ure., h+
<br />Secunny instrument. Unless & ±rrower and Lender agree soother terms of payment, these amounts shall heat snterest i'r -
<br />t "x date of disbursctne nt at the Note rate and shall he payable, with interest, upon notice from I eerier
<br />requesting pavmeril
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