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2 01�04059
<br />Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether now in
<br />eads ce or subsequently erected, aga9nst any hazards, casnaltles, and cont3ngencies, including f3re, for which Lender requires
<br />ins ce. This insurance shall be maintained in the amounts and for the periods that Lender requires. Bonower shall also
<br />ins all improvements on the Properiy, whether now in existence or subsequenfly erected, against loss by tloods to We extent
<br />req ed by the Secretary. All insurance shall be cairied with companies approved by Lender. The insurance policies and any
<br />rene aIs shall be held by Lender and sha1l include loss payable clauses in favor of, and in a fortti acceptable to Lender.
<br />the evettt of loss, Borrower shall give Lender immediate noflce by mail. Lender may make proof of loss if not made
<br />pro fly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment for such loss
<br />dire y to Lender, instead of to Borrower and to Lender,jo9ntly. All or any part of the insurance proceeds may be appHed by
<br />Len r, at its opflon, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, first to any
<br />de ' uent azaounts appTied in the order in paragraph 3, and then to prepayment of principal, pr (b) to the restoration or repair
<br />of damaged Property. Any application of tlie proceeds to the priucipal shall not extend or postpone the due date of the
<br />mon y gayments which are referred to in paragraph 2, or change the amount of such payments. Any excess insurance proceeds
<br />ove amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the
<br />enti legally entided thereto.
<br />the event of foreclosure of this Security Instrument or other transfer of tifle to the Property that extinguishes the
<br />inde edness, all rIght, fltle and interest of Borrawer in and to insurance policies in force shall pass to the purchaser.
<br />Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Lea holds. Bonower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after
<br />the ecution of this Securlty Instrument (or within sixly days of a later sale or trattsfer of the Property) and shall continue to
<br />oc y the Property as Borrower's principal residence for at least one year af�er the date of occupancy, unless Lettder
<br />dete es t6is requirement will cause undue hardship for Borrower, or unless extenuating c3rcumstances exist which are
<br />bey d Borrower's control. Borrower shall notify Lender of any extenuating circumstances. Borrower shall not commit waste or
<br />des y, damage or substantially change the Property or allow the Property to deterlorate, reasonable wear and tear excepted.
<br />Len � r may inspect the Property if the Property is vacant or abandoned or the loan is in default. Lender may take reasonable
<br />acti to protect and preserve such vacant or abandoned Properly. Borrower shall aLso be in default if Borrower, during the
<br />Ioan pplication process, gave maferially false or inaccurate informaflon or statements to Lender (or failed to grovide Lender
<br />wi y material information) in connection with the loan evidenced by the Note, including, but not limited to, representations
<br />con ming Borrower's occupancy of the Property as a principal residence. If th�.s Securlty Instrument is on a leasehold,
<br />Bo � wer shall comply with the provisions of the lease. Tf Borrower acquites fee tide to the Property, the leasehold and fee tifle
<br />sh ot be merged unless Lender agrees to the merger in writing.
<br />Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any
<br />com m�atIon or other taking of any part of the Property, or for conveyance in place of condemnatton, are hereby assigned and
<br />sh e paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security
<br />Ins ent. Lender shall apply such proceeds to We reduction of the indebtedness under the Note and th9s Securlty Instrument,
<br />first o any delinquent amounts applied in We order provided in paragraph 3, and then to prepayment of principal. Any
<br />app flon of the proceeds to the principal shall not extend or postpone the due date of the monthly payments, which are
<br />refe ed to in paragraph 2, or change the amount of such payments. Any excess proceeds over an amount required to pay all
<br />outs ding indebtedness under the Note and this Security Insirument shall be paid to the enflty legally enfltled thereto.
<br />Charges to Borrower and Protection of Lender's Rights in the Property. Borrower shall pay all governmental or
<br />m ipal charges, fines and imposiflons that are not included in paragraph 2. Borrower shall pay these obligations on time
<br />dire y to the entity which is owed the payment. If failure to pay would adversely affect Lender's interest in the Property, upon
<br />Len r's request Borrower sha11 promptly furnish to Lender receipts evidencing these payments.
<br />Borrower fails to make these payments or the payments requ9red by paragraph 2, or fails to perform any other covenants
<br />and eements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rlghts
<br />in Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do
<br />and ay whatever is necessary to protect the valne of the Properly and Lender's rights in the Property, inctuding payment of
<br />taxe hazard 9nswrance and other items mentioned in paragraph 2.
<br />y amounts disbursed by Lender under this paragraph shall become an addiflonal debt of Borrower and be secured by this
<br />Se ty Instrument. These amounts shall bear interest from the date of disbursement at tt►e Note rate, and at the opflon of
<br />Len r shall be immediately due and payable.
<br />Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in
<br />wri g to We payment of the obliga$on secured by the lien in a manner acceptaUle to Lender; (b) contests in good faith the lien
<br />by, r defends aga3nst enforcement of the lien in, legal proceedittgs which in the Lender's opinion operate to prevent the
<br />enf cement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to the Lender subordinating We lien
<br />to Security Instrument. ff Lender determines that any part of the Property is subject to a lien which may attain priorlty over
<br />this ecurity Instrument, Lender may give Borrower a notice identifying the lien. Borrower shall sat3sfy fhe lien or take one or
<br />mo of the actions set forth above within 10 days of the giving of notice.
<br />1590-3NE (oe/97)
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