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<br />UxtaottM Cov&xnxzs. Borrower and Lender covenant and agree as follows:
<br />1. Payment of Pdncfpal and Interest. Borrower shall promptly pay when due the principal of and interest on the
<br />indebtedness evidenced by the Note, prepayment and late charges as provided in the Note, and the principal of and interest
<br />on any Future Advances secured by this Mortgage.
<br />2. ]t'hmds for Torres and Insurance. Subject to applicable law or to a written waiver by Lender, Borrower shall pay
<br />to Leader on the day monthly installments of principal and interest are payable under the Note, until the Note is paid in full,
<br />a sum (herein "Funds"} equal io one-twel=kh of the yearly texas and assessments which may attain priority over this
<br />Mortgage, and ground tents on the Property, if any, plus one-twelhh of yearly premium installments for hazard insurance,
<br />plus one-twelfth of yearly premium installments for mortgage insurance, if any, at4 as reasonably estimated initia[ty and from
<br />time to time by Lender on the basis of assessmenu and bills and reasonable estimates tbereof.
<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 said taxes, assessments,
<br />insurance premiums and ground ants. Lender may not charge for so holding and applying tbe Funds, analyzing said accotmt,
<br />or verifying and compiling said assessments and bills, unless Lender pays Borrower interest on the Funds and applicable law
<br />permits Lender to make such a charge. Borrower and Lender may agree in writing at the time of execution of this
<br />Mortgage that interest on the Funds shalt be paid to Tn~rrower, and unless such agreement is made or applicable taw
<br />requires such interest Yo be paid, Lender shall not be required to pay Borrower any interest of 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
<br />by this Mortgage.
<br />If the amount of the Funds held by Lender, together with the future monthly installments of Funds payable prior to
<br />the due dates of taxes, assessments, insurance premiers and ground rents, shall exceed the amount required to pay said taxes,
<br />assessments, insurance premiums and ground rents as they fall due, such excess shall be, at Borrower's option, either
<br />promptly repaid to Borrower or credited to Borrower on monthly installments of Funds. If the amount of the Funds
<br />hold by Lender shalt not be sufficient to pay taxes, assessments, insurance premiums and ground rents as they fall due,
<br />Borrower shall pay to Lender any amount necessary to make up the deficiency within 30 days from the date notice is mailed
<br />by Lender to Borrower requesting payment thereof.
<br />Upon payment in full of all sums secured by this Mortgage, Lender shall promptly refund to Borrower any Funds
<br />held by Lender. If under paragraph 18 hereof the Property is sold or the Property is otherwise acquired by Lender, Lender
<br />shall apply, no later than immediately prior to the sale of the Property or its acquisition by Lender, any Funds held by
<br />]:.under at the time of application as a credit against the sums secured by this Mortgage.
<br />3. Application of Payments. Unless applicable law provides otherwise, all payments received by Lender under the
<br />Note and paragraphs I and 2 hereof shall be applied by Lender ftrst in payment of amounts payable to Lender by Borrower
<br />under paragraph 2 hereof, then to interest payable on the Note, then to the principal of the Note, and then to interest and
<br />principal an any Future Advances.
<br />4. Charges; Lk~. Borrower shall pay all taxes, assessments and other charges, fines and impositions attributable to
<br />the Property which may attain a priorit,: over this Mortgage, and leasehold payments or ground rents, if any, in the manner
<br />provided under paragraph 2 hereof or, if not paid in such manner, by Borrwe; making payment, when Sue, dircetly Io the
<br />payee thereof. Borrower shall promptly furnish to Lender all notices of amo~!nts due under this paragraph, and in tits ~.
<br />Borrower shall make payment directly, Borrower shad promptly furnish to Lender receipts evidencing such payments.
<br />Borrower shall promptly discharge any Tien which has priority over this Mortgage; provided, that Borrower shall not be
<br />required to discharge any such lien so long as Borrower shall agree in writing to the payment of the obligation secured by
<br />Stich lien in a mannr_r acceptable to Lender, or shall in good faith contest such lien by, or defend enforcement of such lien in,
<br />legal groceed!ngs which opeeate to prevent the enforcement of the hen or forfeiture of the Property or any part thereof.
<br />5. Ilaaard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured
<br />against loss by 5re, hazards included within The term "extended coverage", and such other hazards as Lender may require
<br />and in such amounts and for such periods as Lender may require; provided, that Lender shall rtot require that the amount of
<br />such coverage exceed that amount of coverage required to pay the sums secured by this Mortgage.
<br />The insurance carrier providing the insurance shalE be chosen 6y Borrower subject to approval by Lender, provided,
<br />that such approval shall not be unreasonably withheld. Ali premiums on insurance policies shall be paidrn the manner
<br />provided under paragraph 2 hereof or, if not paid in such marrner, b}' Harrower making payment, when due, directly to ibe
<br />insurance correct.
<br />All insurance policies and renewals thereof shah be in fortrt acceptable To Lender and sha31 include a standard mortgage
<br />clause in favor of and in form acceptable to Lender. Lender shall have the right to hold the policies and renewals thereof,
<br />and Borrower shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. In the event of loss,
<br />Borrower shall give prompt notice to the insurance carrier and Lender. Lender ma}• make proof of loss if not made promptly
<br />by Borrower.
<br />Unless Lender acrd Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of
<br />the Property damaged, provided such restoration or repair is economically feasible and the security of this Mortgage is
<br />twt thereby impaired. If such restoration or repair is not economically feasible ar if the security of this Mortgage would
<br />be impaired, the insurance proceeds shall be applied to the sums secured by this Mortgage. with the excess, if any, paid
<br />to Borrower. If the Property is abandoned by Borrower, or if Borrower fails to respond to Lender within 30 days from the
<br />date notice is mailed by Lendez to Borrower that the insurance carrier offers to settle a claim for insurance t~nefrts, Lender
<br />is authorized to collect and apply the insurance proceeds at Lender's option either r^ re<toration or repair of the Property
<br />or to the stuns secured by this Mortgage.
<br />Unless Lender and Borrower otherwise agree in writing. any such application of proceeds to principal shall not extend
<br />or postpone the due date of the monthly installments referred to in paragraphs 1 and 2 hereof or change the amount of
<br />such installments. if under paragraph 18 hereof the Property is acquired by Lender, a!I right, title and interest of Borrower
<br />in and to any insurance policies and in and to the proceeds thereof resulting from damage to the Property prior to the sale
<br />or acquisition shall pass to Lender to the extent of the sums secured by this Mortgage immediately prior to such sale or
<br />acquisition.
<br />6. Areservatios and Maiutenauce of Property; Leasehaidst Cortd..:..ittlurtrs; Planned Uoft Devdopmeuts. Borrower
<br />shall keep the Property in good repair and shalt not commit waste or permit impairment or deterioration of the Property
<br />and shall comply wish the provisions of any ]ease if this Mortgage is on a leasehold. If this Mortgage is on a unit in a
<br />condominitm or a planned uaii development, Borrower shall perform al] of Borrowers obligations under the declaration
<br />er covenants creating or governing the condominium or planned unit development, the by-laws and regulations of the
<br />condominium of planned volt development, and rnnstituent documents. if a condominium or planned trait development
<br />rider is executed by Borrower and recorded together with ilEts Mortgage, the covenants and agreements of such rider
<br />shall he incorpazated into and shall amend and supplement the covenants and agreements of this Mortgage as if -the rider
<br />were a part hereof.
<br />7. Protection ~ Lender's Security. If Borrower fails to perform the covenants and agreements contained in this
<br />Mortgage, or if any action or proceeding is commenced which materially affects Lender's interest in the Property,
<br />iacltading, bt~t not limited to, eminent domain; insalvertcy, code enforcement, or arrangements or proceedings involving a
<br />bankrupt or deceden4 then Leader at Lenrer's option, upon notice to Borrower, may make such appearances, disburse snch
<br />stems and take such action as is necessary to protect Lender's interest, including, but not limited to, disbursement of
<br />reasonable attorney's fries and entry upon the Property to make repairs. If Lender required mortgage insurance as a
<br />condition of making rho loan soured by this Mortgage, Borrower shall pay the premiums required to maintain such
<br />insurance in effect until such time as the requirement for such insurance terminates in accordance with Borrower's and
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