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UNIFOltM CovFNANrs. IIorrower and L.ender covenant and agree as follows:
l. Payment ot Princlpa! ~utd Interest; Prepayment and Late Charges. Horrower shall promptly pay when due
the ptincipal of and interest on the debt evidenced by the Note and any prepayment and late charges due under the Note.
2. ~Lnds for TAxes and Insurance. Subject to applicable law or to a written waiver by Lender, Horrower shall pay
to I.ender on thc day monthly payments are due under the Note, until the Note is paid in full, a sum ("Funds") equal to
one-twtlRh of: (a) yearly taxes and assessments which may attain priority over this Security Instrument; (b) yearly
leasehold payments or ground rents on thc Property, if any; (c) yearly hazard insurance premiums; and (d) yearly
mortgage~insuF~ce premiums, if any. These itzms are called "escrow items." Lender may estimate the Funds due on the
hasis Of c'tir?~ent ata and reasonable estimates of future escrow items.
The Funds shall be held in an institution the deposits or accounts oP which are insured or guaranteed by a federal or
state agency (including Lender if L.ender is such an institution). Lender shall apply the Funds to pay the escrow items.
Lender may not ct~arge for holding and applying the Fonds. analyzing the account or verifying the escrow items, unless
I_tnder pays Borrower interest on the Funds and.applicable !aw permits Lender to make such a charge. Borrower and
L,ender may agree in writing that interest shall be paid on the Funds. Unless an agreement is made or applicable law
requires interest to be paid, Lender shall not be required to pay Borrower any intcrest or earnings on the Funds. I,ender '
shall give co Borrower, without charge~ an annual accounting of the Funds showing credits and debits to the Funds and the `
putpose for which each debit to the Funda vwas made. The Funds are pledged as additional security for the sums sccured by ;
this Security Instrument.
If the amount of the Funqs held by Lender, together with the future monthly payments of Funds payable prior to
the due date9 of the escrow items, shall eaceed the amount roquired to pay the escrow items when du~e, the excess sha!1 be,
at Borrower's option. either promptly repaid to Borrower or creditecl to Borrower on monthly payments uf Funds. If the
amount of the Funds held by Lender is not sufficient to pay the escrow items when due, Borrower shall pay to I.ender any
amount nocessary to make up ihe deficiency in one or more payments as required by I.ender.
Upon payment in full of all sums secured by this Securiiy Instrument, L.endec shall promptly refund to Borrower
~ny Fnn~ts he~d by Lender. If under paragraph 19 the Propetty is sold or acquired by Lender, Lender shall apply, no later
than immodiately prior ta the sale of the Property or its acquisition by Lender, any Funds held by Lender at the time of
applic~tion as a credit against the sums secured by this Security Instrument.
3. Ap~caHon o! P~tytu~nts. Unless applicable law provides otherwist, all payments received by Lender under
paragraphs 1 and 2 shall be applied: flrst, to late charges due undcr the Note; second, to prepayment charges due under the
Note; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due.
4. Charges; Liens. Borrov+~er shall pay all taxes, assessments, charges, fines and impositions attributable to the
Property which may attain priority over this Socurity Instrument, and leasehold payments or ground rents, if any.
Bono~+er shall pay these obligations in the manner provided in paragraph 2, or if not paid in that manner, Borrower shall _
pay thtm on time directly to the person owed payment. IIorrower shall promptly furnish to Lender all notices of amounts
to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to Lender
receipts evidencing the payments.
Sorrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a)
agr~es in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good -
faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to
prevent the enforcement of the litn or forfeiture of any part of the Property; or (c) secures from the holder of the lien an
agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of -
the Property is subject to a lien which may attain priority over this Security Instrument, Lender may gi~e Borrower a
notice identifying the lien. Bonower shall satisfy the lien or take one or more of the actions set forth above ~vithin 10 days
of the giving of notice.
5. Hazard Insurance. Bonower shall keep the improvements now existing or hereafter erected on the Property
insured against loss by fire, hazards included within the term "extended coverage" and any other hazards for which I.ender ~
requires insurance. This insurance shall be maiatained in the amounts and for the periods thai Lender requires. The
insurance c,arrier providing the insurance shall Ue chosen by Borrower subject to Lender's approval which shall not be
unreasonably withheld.
Al! insurance policies and renewals shall be acceptable to Lender and shall include a standard moRgage clause. ~
Lender shall have the right to hold the policies and renewaLs. If I;ender requires, Borrower shaU promptly give to Lender
all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insuran:x
carrier and Lender. Lender may make proof of loss if not made promptly by Borrower.
Unltss Lender and Borrower othenvise agree in writing, insurance proceeds shall be applied to restoration or repair
of the Property damaged, if the restoraeion or repair is economically feasible and Lender's 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
applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. If
Borrower abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier has
offered to settle a claim, then Lender may collect the insuranee procceds. Lender may use the proceeds to repair or restore .
the Property or to pay sums secured by this Security Instrument, whether or not then due. The 30-day period will begin
when the notice is given.
Unless Lender and Borrower otherwise agree in writing, any application of proceeds to principal shall not eztend. or
postpone the due date of the monthly payments referred to in paragraphs 1 and 2br change the amount of the payments. If
under paragraph 19 the Property is acquired by Lender, Borrower's right to any insurance policies and proc~eds resulting
from damage to the Property prior to the acquisition shal! pass to Lender to the extent of the sums secured by this Security
Instrument immediately prior to the acquisition.
6. PreservaNon and Maintenance of Property; Leasehalds. Borrower shall not destroy, damage or substantially ~
change the Property, allow the Property to deteriorate or commit waste. If this Security Instrument is on a leasehold, ~
Borrower shall comply with the provisions otth~e lease, and if Borrower acquires fee title to the Property, the leasehold and , ~'z
fee title shall not merge unless Lender agrees to the merger in writing.
7. Protection of Lender's Rlghts in the Property; Mortgage Insurance. If Borrowcr fails to perform the -
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covtnants and agreements contair+ed in this Security Instrument, or there is a legal proceeding that may signifiFantly affect
Lender's rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation or to enforce iaws or ~
regulations}, then I,ender may do and pay for whatever is necessary to protect the value of the Property and Lender's rights ~
in the Property. Lender's actions may include paying any sums secured by a lien which has priority cver this Security
I~strument~ appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although =
L,cnder may take action under this paragtaph 7, Lender does not have to do so. ~
Any'amounts di~bursed by Lender ureder this paragraph 7 shall bezome additional debt of Borrower secured by this ~
Security Instrument. Unless Borrower and Lender agree to other terms of payment, these amounts shall bear interest from
the date of disbursement at the Note rate and shal! be payable, with interest, upon notice from Lender to Borrower
requesting payment. ~
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