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~oioo45~8 security is not lessened. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be ap~Iied first to the reduction of any indebtedness under a Second Note and Second Security Instrument held by the Secretary on the Property and then to the reduction of the indebtedness under the Note and this Security Instrument. Any excess insurance proceeds over an amount required to paY all outstanding indebtedness under the Nate and this Security Instrument shall be paid to the enttty legally entitled thereto. In the event of forecbsure of this Security Instrument ar other transfer of title to the Property that extinguishes the indebtedness, all right, title and interest of Harrower in and to insurance policies in force shall pass to the purchaser. 4. Occupancy, Preservation, Maintenance and Protection of the Pro rty; Borrower's Loan Application; Leaseholds. Harrower shall occupy, establish, and use the I~roperty as Borrower's principal residence after the execution of this Security Instrument, and Borrower (or at least one Borrower, if initially more than one person are Harrowers) shall continue to occupy the Property as Borrower's principal residence for the term of the Security Instrument. "Principal residence" shall have the same meaning as in the Loan Agreement. Harrower shall not commit waste or destroy, damage or substantially change the Propperty or albw the Property to deteriorate, reasonable wear and tear excepted. Borrower shall also be in default if Borrower, during the loan a plication process, gave materially false or inaccurate information or statements to Lender (ar failed to provide Lender with any material information) in connection with the ban evidenced by the Note, including, but not limited to, representations concerning Borrower's occupancy of the Property as a principal residence- If this Security Instrument is on a leasehold, Borrower shall comply with the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title shall not be merged unless Lender agrees to the merger in writing. 5. Charges to Harrower and Protection of Lender's Rights in the Property. Harrower shall pay all governmental or municipal charges, fines and impositions that are not included in Paragraph 2. Borrower shall pay these obligations on time directly to the entity which is owed the payment. If failure to pay would adversely affect Lender's interest in the roperty, upon Lender's request Borrower shall promptly furnish to Lender receipts evidencing these payments. Borrower shall romptly discharge any lien which has priority aver this Security Pnstrument in the manner provlaea in Paragraph 12(c). If Borrower fails to make these payments or the property charges required by Paragraph 2, or fails to perform any other covenants and a reements contained in this Security Instrument, or there is a legal proceeding that may significant~jr affect Lender's rights in the Property (such as a proceeding in bankruptcy, far condemnation or to enforce laws or r~egulatioris , then Lender may da and pay whatever is necessary to protect the value of the Property and ender's rights in the Property, including ~yment of taxes, hazard insurance and other items mentioned in Paragraph 2. To protect Lender's security in the Property, Lender shalt advance and charge to Borrower all amounts due to the Secretary for the Mortgage Insurance Premium as defined in the Loan Agreement as well as all sums due to the loan servicer far servicing activities as defined in the Loan Agreement. Any amounts disbursed by Lender under this Paragraph shall become an additional debt of Borrower as proved for in the Loan Agreement and shall be secured by this Security Instrument. 6. Inspection. Lender or its agent may enter on, inspect or make appraisals of the Property in a reasonable manner and at reasonable times provided that Lender shall give the Borrower notice pprior to any inspection , or appraisal specifying a purpose far the inspection or appraisal which must be related to Lender's tnterest in the Property. If the property is vacant or abandoned or the loan is in default, Lender may take reasonable action to protect and preserve such vacant or abandoned Property without notice to the Harrower. 7. Condemnation.The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in place of condemnation shall be mid to Lender. The proceeds shall be applied first to the reduction of any indebtedness under a Second Nate and Second Security Instrument held by the Secretary on the Property, and then to the reduction of the indebtedness under the Note and this Security Instrument. Any excess proceeds over an amount required to pay all outstanding indebtedness under the Nate and this Security Instrument shall be paid to the entity legally entitled thereto. $. Fees. Lender may collect fees and charges authorized by the Secretary. First American Loan Production Services Nebraska HELM Security Instrument t] 2008 First American Real Estate Solutions LLC FALPS # UB02 : 05/08 Page 3 NMFL #8807NE (QFNE)