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<br />and shall continue to occupy the Property as Bonower's principal residence for at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue hardship for Bonower, or unless extenuating
<br />circumstances exist which are beyond Bonower's control. Borrower shall notify Lender of any extenuating
<br />circumstances. Bonower shall not commit waste or destroy, damage or substantially change the Property or allow
<br />the Property to deteriorate, reasonable weaz and tear excepted. Lender may inspect the Properiy if the Property is
<br />vacant or abandoned or the loan is in default. Lender may take reasonable action to protect and preserve such vacant
<br />or abandoned Property. Bonower shall also be in default if Bonower, during the loan application process, gave
<br />materially false or inaccurate information or statements to Lender (or failed to provide Lender with any material
<br />information) in connection with the loan evidenced by the Note, including, but not limited to, representations
<br />concerning Bonower's occupancy of the Property as a principal residence. If this Security Instrument is on a
<br />leasehold, Borrower shall comply with the provisions of the lease. If Bonower acquires fee title to the Property, the
<br />leasehold and fee title 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
<br />with any condemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are
<br />hereby assigned and shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid
<br />under the Note and this Security Instrument. Lender shall apply such proceeds to the reduction of the indebtedness
<br />under the Note and this Security Instrument, first to any delinquent amounts applied in the order provided in
<br />paragraph 3, and then to prepayment of principal. Any application of the proceeds to the principal shall not extend
<br />or postpone the due date of the monthly payments, which are refened to in paragraph 2, or change the amount of such
<br />payments. Any excess proceeds over an amount required to pay all outstanding indebtedness under the Note and this
<br />Security Instrument shall be paid to the entity legally entitled thereto.
<br />7. Charges to Borrower and Protection of Lender's Rights in the Property. Bonower shall pay all
<br />governmental or municipal charges, fines and impositions that are not included in paragraph 2. Bonower shall pay
<br />these obligations on time directly to the entity which is owed the payment. If failure to pay would adversely affect
<br />Lender's interest in the Property, upon Lender's request Bonower shall promptly furnish to Lender receipts
<br />evidencing these payments.
<br />If Borrower fails to make these payments or the payments required by paragraph 2, or fails to perform any other
<br />covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly
<br />afFect Lender's rights in the Properiy (such as a proceeding in bankruptcy, for condemnarion or to enforce laws or
<br />regulations), then Lender may do and pay whatever is necessary to protect the value of the Property and Lender's
<br />rights in the Property, including payment of taxes, hazard insurance and other items mentioned in paragraph 2.
<br />Any amounts disbursed by Lender under ttus paragraph shall become an additional debt of Bonower and be
<br />secured by this Security Instrument. These amounts shall bear interest from the date of disbursement at the Note rate,
<br />and at the option of Lender shall be immediately due and payable.
<br />Bonower shall promptly discharge any lien which has priority over this Security Instrument unless Bonower:
<br />(a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests
<br />in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's
<br />opinion operate to prevent the enforcement of the lien; or (c) secures from the holder of the lien an agreement
<br />satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the
<br />Properiy is subject to a lien which may attain priority over this Security Instrument, Lender may give Bonower a
<br />notice identifying the lien. Bonower shall satisfy the lien or take one or more of the acrions set forth above within
<br />10 days of the giving of notice.
<br />8. Fees. Lender may collect fees and charges authorized by the Secretary.
<br />9. Grounds for Acceleration of Deb�
<br />(a) Defaul� Lender may, except as limited by regulations issued by the Secretary in the case of payment
<br />defaults, require immediate payment in full of all sums secured by this Security Instrument if:
<br />(i) Bonower defaults by failing to pay in full any monthly payment required by this Security
<br />Instrument prior to or on the due date of the next monthly payment, or
<br />(ii) Bonower defaults by failing, for a period of thirty days, to perform any other obligations
<br />contained in this Security Instrument.
<br />(b) Sale Without Credit Approval. Lender shall, if permitted by applicable law (including section 341(d)
<br />of the Garn-St. Germain Depository Institurions Act of 1982, 12 U.5.C. 1701j-3(d)) and with the prior
<br />approval of the Secretary, require immediate payment in full of a11 sums s�ured by this Security Instrument if:
<br />(i) All or part of the Property, or a beneficial interest in a trust owning all or part of the Property, is
<br />sold or otherwise transferred (other than by devise or descent), a.nd
<br />(ii) The Property is not occupied by the purchaser or grantee as his or her principal residence, or the
<br />purchaser or grantee does so occupy the Properiy, but his or her credit has not been approved in
<br />accordance with the requirements of the Secretary.
<br />(c) No Waiver. If circumstances occur that would permit Lender to require immediate payment in full,
<br />but Lender does not require such payments, Lender dces not waive its rights with respect to subsequent events.
<br />(d) Regulations of HUD Secretary. In many circumstances regulations issued by the Secretary will limit
<br />Lender's rights, in the case of payment defaults, to require immediate payment in full and foreclose if not
<br />paid. This Security Instrument does not authorize acceleration or forecloswe if not pernutted by regulations
<br />of the Secretary.
<br />(e) Mortgage Not Insured. Borrower agrees that if this Secwity Instrument and the Note are not
<br />determined to be eligible for insurance under the National Housing Act within 6 0 DAYS
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