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106574
<br />2. Funds for Taxes and Insurance. Subject to applicable law or to a written waiver by Lender. Borrower shall iisy to
<br />Lenderon the day monthly payments are due under the Note, until the Note is paid in full, a sum ( "Funds ") equal to one -twel fth of:
<br />(a) yearly taxes and assessments which may attain priority over this Security Instrument; (b) yearly leasehold payments or ground
<br />rents on the Property, if any; (c) yearly hazard insurance premiums; and (d) yearly mortgage insurance premiums, if anY: These-
<br />items are called "escrow items." Lender may estimate the Funds due on the basis of current data and reasonable estimates of
<br />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 state
<br />agency (including Lender if Lender is such an institution). Under shall apply the Funds to pay the escrow items. Lender may not
<br />charge for holding and applying the Funds, analyzing the account or verifying the escrow items, unless Lender pays Borrower
<br />intoreston the Funds and applicable law permits Lender to make such a charge. Borrower and Lender may agree in w ritins that
<br />interest shall be paid on the Funds. Unless an agreement is made or applicable law requires interest to be paid, Lender shall not be
<br />required to pay Borrower any interest or earnings on the Punds. Lender shall give to Borrower, without charge, an annual
<br />accounting of the Funds showing credits and debits to the Funds and the purpose for which each debit to the Funds was made. The
<br />Funds are pledged as additional security for the sums secured by this Security Instrument.
<br />If the amountof the Funds held by L ender, together with the future monthly payments of Funds payable prior to thedue dates
<br />of these escrow items. shall exceed the amount required to pay the escrow items when due, the excess shall be, at Borrower's
<br />option, either promptly repaid to Borrower or credited to Borrower on monthly payments of Funds. If the amount of the Funds
<br />held by Lender is not sufficient to pay the escrow items when due, Borrower shall pay to Lender any amount necessary to make up
<br />the deficiency in one or more payments as required by Lender.
<br />Upon payment in full of all sumssecured by this Security Instrument, Lender shall promptly refund to Borrower any Funds
<br />held by Lender. If under paragraph 19 the Property is sold of acquired by Lender. Lender shall apply, no later than immediately
<br />prior to the saleof the Property or its acquisition by Lender, any Funds held by Lender at the timeof application as a credilagainst
<br />the sums secured by this Security Instrument.
<br />3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under paragraphs
<br />1 and 2 shall be applied: first, to amounts payable under paragraph 2; second, to interest due; and last, to principal due.
<br />4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Property
<br />which may attain priority over this Security I nstrument. and leasehold payments or ground rents, if any. Borrower shall pay these
<br />obligations in the manner provided in paragraph 2. or if not paid in that manner. Borrower shall pay them on time directly to the
<br />person owed payment. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this paragraph. If
<br />Borrower makes these payments directly, Borrower shall promptly furnish to Lender receipts evidencing the payments.
<br />Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in
<br />writingtothe paymentofthe obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien by,
<br />or defends against enforcementof the lien in, legal proceedings which in the Lender's opinion operate to prevent the enforcement
<br />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
<br />subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which
<br />may attain priority over this Security Instrument, Lender may give Borrowers notice identifying the lien. Borrower shall satisfy
<br />the lien or take nue or more of the actions set forth above within 10 days of the giving of notice.
<br />b. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured
<br />against loss by fire, hazards included within the term "extended coverage" and any other hazards for which Lender requires
<br />insurance. This insurance shalt be maintained in the amounts and for the periods that Lender requires. The insurance carrier
<br />providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be unreasonably withheld.
<br />All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause. Lender shall
<br />have the right to hold the policies and renewals. If Lender requires, Borrower shall promptly give to Lender all receipts of paid
<br />premiums and renewal notices. In the eventof lu,,, Burro« er shall give prompt notice to the insurance carrier and Lender. Lender
<br />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 of the
<br />Property damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the restoration or
<br />repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall he applied to the sums
<br />secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. If Borrower abandons the
<br />Property, or does not answer within 30 days a notice from Lender that the insurance carrier has offered to settle a claim, then
<br />Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay sums secured
<br />by this Security Instrument, whether or not then due. The 30 -day period will begin when the notice is given.
<br />Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal shall notextend or postpone
<br />thedue dateof the monthly payments referred to in paragraphs 1 and 2or change the amountofthe payments. If under paragraph
<br />19 the Property is acquired by Lender. Borrower's right to any insurance policies and proceedings resulting from damage to the
<br />Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security Instrument immediately
<br />prior to the acquisition.
<br />B. Preservation and Maintenance of Property; Leaseholds. Borrower shall not destroy. damage or substantially change
<br />the Property, allow the Property to deteriorate or commit waste. If this Security Instrument is on a leasehold. Borrower shall
<br />comply with the provisions of the lease, and if Borrower acquired fee title to the Property, the leasehold and fee title shall not
<br />merge unless Lender agrees to the merger in writing.
<br />7. Protection of Lender's Rights in the Properly; Mortgage Insurance, If Borrower fails to perform the covenants and
<br />agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lenders rights in
<br />the Property (such as a proceeding in bankruptcy, probate, for condemnation or to enforce laws of regulations), then Lender may
<br />do and pay for whatever is necessary to protect the value of the Property and Lender's rights in the Property. Lender's actions may
<br />include paying any sums secured by a lien which has priority over this Security Instrument, appearing in court, paying
<br />reasonable attorney's fees and entering on the Property to make repairs. Although Lender may take action under this paragraph
<br />7, Lender does not have to do so.
<br />Any amounts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this Security
<br />instrument. Unless Borrower and tender agree to other terms of payment. there amounts shall bear interest from the date of
<br />disbursement at the Note rate and shall be payable. with interest, upon notice from Lender to Borrower requesting payment.
<br />If Lender requited mortgage insuranceas acondition of making the loan secured by this Security Instrument, Borrower shall
<br />pay the premiums required to maintain the insurance in effect until such t i me as the requirement for the insurance terminates in
<br />accordance with Borrower's and Under *% written agreement or applicable law.
<br />11. inspections. Lender or its agent may make rea tmable entries ulion and mspectmns of the Pnigmrtr l ender shall glue
<br />Borrower notice at the time of or prior to an instxctinn tkcifying reasunahlc cause for the ;mspection
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