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UHtpau.t CoveN~HTS. Borrower and Lender covenant a~d agree as follows: ~
l. layineat ot Prioclpal and lstecesf. Borrowtr shall promptly pay when due the principal of and intercst on the i
indebted~eu evidcnced by the Note, prepayment and late charges as pravided in the Note, and the principai of and intercst '
on any Future Advances secured by this Mortgage.
2. Fnnds [ar Tuea and Insurance. Subject to applicable law• or to a wr~tten waiver by Lender, Borrow~er shatl pay
to Ltnder on the day monthly installments of principal and interest are pa}•able under the Note, until the Note is paid in full,
a sum (herein "Funds") equal to one-twelfth of the ~•early tates and assessments which may attain prinrity over this i
Mortgage, and ground rents on the Pmperty, if an}~, plus one-tw-eltth of ~~early premium installments for hazard imurance. '
plus one-twelfth of yearly premium installments tor mortgage msurance, if any, alt as reasonably estimated initiatly and from i~
time to time b}~ Lender on the basis of assessments and bills and reasonable ~stimates thereof.
"Il~e Funds shall be held in an institwion the deposits or accou~ts vf which are insured or gvaranteed by a Federal or
state agency (including Lender if Lender is such an instiwtion). I_ender shall apply~ the Funds to pa~~ said taxes, assessments,
insurance premiums and ground rents. l.ender may~ not charge for so holding and applying the Funds, anal~~zing said account,
or verifying and compiling said assessments and bills, unless Lender pa~s Barrowcr interest on the Funds and applicable law
permits Lender to make such a charge. Borrower and Lender may agree in w•riting at the time of execution of this
Mortgage that interest on the Funds shal! be paid to Borrower, and unless such agreement is made or applicable law
requires such interest to be paid, Lender shall not be r~quired to pa~• Borrower ~r.~~ interest or earnings on the Funds. l.ender i
shall give to Borrower, without charge, an annual accounting uf the Funds showing credits and debits to the Funds and the }
purpose for which each debit to the Funds was made. The Funds are pledged as additional security for the sums secured
by this Mortgage.
If the amount of the Funds held by Lender, together with the Future monthly installments of Funds payable prior to
the due dates of taxes, assessments, insurance premiums and ground rents, shall exceed the amount reyuired to pay said taxes,
assessments, insurance premiums and ground rents as they~ fall due, such excess shall be, at Borrow•er's option, either
promptly repaid to Borrower or credited to Borrower on monthly installments of Funds. If the amount of the Funds
held by Lender shall not be sutTicient to pay taxes, assessments, insurance prem~ums and ground rents as they fall due.
Borrower shall pay to Lender an}• amount necessary to mai;e up the defirienc~• within 30 da~•s from the date notice is mailed
by Lender to Borrower requesting payment thereof.
Upon payment in fuU of all sums secured by this Murtgage, I_ender shall prompdy refund to Borrower any Funds
held by Lender. If under paragraph 18 hereof the Proprrty is sold or thc Property is othenvise acquired bp Lender, Lender
shall apply, no later than immedialely prior to the sale of the Property or its acquisition by I_ender, any Funds held by
Lender at the time of application as a credit against the sums secured b}• th~s Mortgage. ~
3. Application of Payments. Unless applicable law• provides otherH•ise, all payments recei~~ed by Lender under the ~
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Note and paragraphs 1 and 2 hereof shall be applied by l.ender first in pa~ment of amounts payable to Lender by Borrower ;
under paragraph 2 hereof, then to interest payable on the ;~ote, then to the principal of the IVote, and thcn to interest and
principal on any Future Advances.
4. Charges; Liens. Borrower shall pay all taxes, assessments and other charges, fines and impositions attributable to
the ProQerty which may attain a priority over this I~tortgage, and leasehold payments or ground rents, if any, in the manner
provided under paragraph 2 hereof or, if not paid in such manner, by Borrower making payment, a~hen due, directly to the
payee thereof. Borrower shall promptly furnish to Lender all notices of amounts due under this paragraph, and in the event
Borrow•er shall make payment direcdy, Borrow~er shall promptly furnish to Lender receipts evidencing such payments.
Borrower shall prompdy diseharge any lien which has priority over this Mortgage: Provided, that Borrower shall not be
required to discharge any such lien so long as Borrower shall agree in Writing to the pa}'ment of the obligation secured by
such lien in a manner acceptable to Lender, or shap in guod faith contest such lien by, or defend enforcement of such lien in,
legal pra:eedings which operate to prevent the enforcement of the lien or forfeiture of the Property or any part thereof.
S. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter erccted on the Property insured
against loss by fire, hazards included within the term "extended c~verage", and such other hazards as Lender may require
and in such amounts and for such periods as Lender may require; provided, that Lender shall not reyuire that the amount of
such coverage exceed that amount of coverage required to pay the sums secured b}• this Mortgage.
' The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by Lender; provided,
! that such approval sha11 not be unreazonably withheld. All premiums on insurance policies shal! be paid in the manner
; provided under paragraph 2 hereof or, if not paid in such manner, by Bonower making payment, when due, directly to the
E insurance carrier.
~ Ail insurance policies and renewals thereof shal.l be in form acceptable to Lender and shall include a standard mortgage
~ clause in favor of and in form acceptable to Lender. Lender shall have the right to hold the policies and renewals thereof.
~ and Borrow~er shall promptly furnish to Lender all renewal notices and all receipts of paid premiums. In the event of loss,
~ Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptl}
b;~ Borrower. , ~
Unless Lender and Borrower otherw ise agree in writing, insurance proceeds shall be applied to restoration or repair of
the Property damaged, provided such restoration or repair is economically feasible and the security of this Mortgage is
not thereby impaired. If such restocation or repair is not economically feasible or if the security of this Mortgage would
be impaired, the insurance proceeds shall be aQplied to the sums secured by this Mortgage, w~ith the excess, if any, paid
~ to Borrower. If the Propert~~ is abandoned b} Borrower, or if Borrower fails to respond to Lender within 3~ days from the
date notice is mailed by Lender to Borrower that the insurance carrier offers to settle a claim for insurance benefits, Lender
is authorized to collect and apply the insurance proceeds at Len~ier's option either to restoration or repair of the Property
or to the sums secured by this Mortgage.
Unless Lender and Borrow~er othen+ise agree in writing. any such application of proceeds to principal shall not extend
or postpone the due date of the monthly installments referred to in paragraphs I and 2 hereof or change the amount of
such installments. If under paragraph 18 hereof the Property is acyuired by Lender, all right, title and interest of Borrower .
in and to any insurance policies and in and to the proceeds thereof resulting from damage to the Prope~ty prior to the sale
~ or acquisition shall pass to Lender to the ertent of the sums secured by this ~tortgage immediately prior to such sale or
acquisition.
~ 6. Presenation and ~taintenance of Propert~; Leaseholds; Condominiums: Planned Unit Developments. Borrower
shall keep the Property in good repair and shall not commit waste or permit impa~rment or deterioration of the Property
~ and shall compl}~ with the provisions of any lease if this ~9ortgage is on a leasehold. If this bfortgage is on a unit in a
; rondominium or a planned unit development, Borrower shall perform all of Borrower's obligations under the declaration
~ ur covenants creating or governing the condeminium or planned unit development, the by-laws and regulations of the
g condominium or planned unit development, and constituent documents. If a~ondominium or planned unit de~•elopment
~ rider is executed by Botrower and rec~rded together ~~th this Mortgage, the covenants and agreements of such rider
shall be incorpurated into and shall amend and supplement the covenants and agreements of this Mortgage as if the rider
~ µ~ere a part hereof.
~ 7. Protection of Lende~s Security. If Borrower fails to perform the covenants and agreements contained in this
Mortgage, or if any action or proceeding is commenced which materially af~ects Lender's interest in the Property,
including, but not limited to, eminent domain, insolve~icy, code enforcement, or arrangements or proceedings involving a
bankrupt or decedent, then Lender at Lender's option, upon no;ice ro Borrower, may make such appearances, disburse such
sums and take such action as is necessar}• to protect Lender's interest, including, but not limited to, disbursement of
~ reasonable attorney's fees and entry upon the Property to make repairs If Lender required mortgage insurance as a ~
~ condition of malcing the loan secured b~• this l~iortgage. Borro~e~ shall pay the premiums required to maintain such
~ insurance in efiect until such time as the requirement for such insurance terminates in accordan~e with Borrower's and
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