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<br />200809410
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<br />4. Fire, Flood arid Other Hamrd Insurance. Borrower shall insure all improvements on the Property, whether now in
<br />existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which Lender requires
<br />insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shall also
<br />insure all improvements on the Property, whether now in existence or subsequently erected, against loss by floods to the extent
<br />required by the Secretary. All insurance shall be carried with companies approved by Lender. The Insurance policies and any
<br />renewals shall be held by Lender and shall 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 not made
<br />promptly by Borrower. Each Insurance company concerned is hereby authorized and directed to make payment for such loss
<br />directly to Lender, Instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be applied by
<br />Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, first to any
<br />dellnquent amounts applied in the order In paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair
<br />of the damaged Property. Any application of the proceeds to the principal shall not extend or postpone the due date of the
<br />montllly payments which are referred to in paragraph 2, or change the amount of such payments. Any excess insurance proceeds
<br />over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the
<br />entity legally entitled thereto.
<br />In the event of foreclosure of this Securily Instrument or other transfer of title to the Property that extinguishes the
<br />indebtedness, all right. title and interest of Borrower in and to Insurance policies in force shall pass to the purchaser.
<br />S. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after
<br />the execution of this Securily Instrument (or within sixty days of a later sale or transfer of the Property) and shall continue to
<br />occupy the ~roperty as Borrower's principal residence for at least one year after the date of occupancy, unIess Lender
<br />determines this requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist which are
<br />beyond Borrower's control. Borrower shall nollfy Lender of any extenuating circumstances. Borrower shall not commit waste or
<br />destroy, damage or substantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted,
<br />Lender may inspecl the Property If the Property is vacant or abandoned or the loan is.in default. Lender may take reasonable
<br />action to protect and preserve such vacant or abandoned Property. Borrower shall also be in default if Borrower, during the
<br />loan application process, gave materially false or inaccurate information or statements to Lender (or failed to provide Lender
<br />with any material Information) In connection wilh the loan'evidenced by the Note, including, but nollimlted to, representations
<br />concerning Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold,
<br />Borrower shall comply with the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title
<br />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 with any
<br />condemnation or other laking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned and
<br />shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security
<br />Instrument. Lender shall apply such proceeds to the reduction of the indebtedness under the Note and this Security Instrument,
<br />first to any delinquent amounts applied in the order provided in paragraph 3, and then to prepayment of principal. Any
<br />appllcallon of the proceeds to the principal shall not extend or postpone the due date of the monthly payments, which are
<br />referred 10 in paragraph 2, or change the amount of such payments. Ally excess proceeds over an amount required to pay all
<br />outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled therelo.
<br />7. Chargell to Borrower and Protection of Lendcr's Rights in the Property. Borrower shall pay all governmental or
<br />municipal charges, fines and impositions that are not included in paragraph 2. Borrower shall pay these obligations on time
<br />directly to the entity which is owed the payment. If failure 10 pay would adversely affect Lender's Interest in the Property, upon
<br />Lender's request Borrower shall promptly furnish to Lender receipts evidencing these payments.
<br />If Borrower fails 10 make these payments or the payments required by paragraph 2, or fails to perform any other covenants
<br />and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly afTect Lender's rights
<br />In the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do
<br />and pay whatever is necessary to protect the value of the Property and Lender's righls In the Property, including payment of
<br />taxes, hazard Insurance and other items mentioned in paragraph 2.
<br />Any amounts disbursed by Lender under this paragraph shall become an additional debt of Borrower and be secured by this
<br />Security Instrument. These amounts shall bear interest from the date of disbursement at the Note rate, and at the option of
<br />Lender shall be immediately due and payable. .
<br />Borrower shall promptly discharge any lien which has priority over thls Security Instrument unless Borrower: (a) agrees in
<br />writing to the payment of the obllgallon secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien
<br />by, or defends againsl enforcement of the lien In, legal proceedings which in the Lender's opinIon operate to prevent the
<br />enforcement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to the Lender subordinating the lien
<br />to this Security Instrument. If Lender determines that any part of the Property Is subject 10 a lien which may altain priority over
<br />Ihis Security Instrument, Lender may give Borrower a nollce identifying the lien. Borrower shall sallsfy the lien or take one or
<br />more of the actions set forth above within 10 days of the giving of notice.
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<br />Gee. 1590-3NE (08/97)
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