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UNtFottM Cov~tv~NTS. Eiorrower and Lerider cavcnani and agree as follows:
l. P~yment of Prlnclpai and lntere~t; Prepayment And I.~te ChArges. Bor~ower shall promptly pay when duc
the principal oPand interest on Ihe debt evidenced by the Note and any prepayment and late charges due under the Note.
2, Funds for Taxes and Insurance. ' Subject to applicable law or to a written waivec by Lender~ gorrower shall pay
to Lender on the day monthly payments are due under the Note, untit the Note is p~id in full, a sum ("Funds") equal to :
one-twelRh of (a) yearly taxes and assessments which may attain priority o?~er this Security Instrument; (b) yearly ;
~ leasehold payments or ground rents on the Aroperty, if any; (c) yearly hazard insurance premiums; and (d) yearly ;
mortgage insurance premiums, if any. These items are called "escrow items." Lender may estimate the Funds due on the f
bnsis of current data and reasonable estimates of future escrow items.
' The Funds shall be held in an institution the deposits or accounts of which are insur,,~ or guaranteed by a federal or
state agency (including Lender if Lender is such an institution). Lender sha!! apply the Funds to pay the escrow items. •4
Lender may not charge fbr holding and ap}~lying tt~e Funds, analyzing the account or verifying ?he escrow items, unless ; j
Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. Borrower and
Lender may agre~ in writing that interest shall be paid on the Funds. Unless an agreement is made or applicable law i
requires interest to be paid, Lender shall noi be required to pay Barrower any interest or earnings on the Funds. Lender `
shal! give ta IIorrower, without charge, an annual accounting of the Fur.ds showing credits and debits to the Funds and the
purpose for which each debit to the Hunds was made. The Funds are pledged as additional security for the sums secured by
this Security Instrument.
If the amount of the Funds held by Lender, together with the Puture monthly payments ot Funds payabte prior to
the due dates oP the escrow items, shall exceed the amount required to pay the escrow items when due, the excess shall t~e,
at Borrower's option, either promptiy repaid to Borrower or credited to Borrower on monthly payments of Funds. If the
amount of the Funds held by Lender is noi sufficient to pay the escrow items when due, Borrower shall pay to Lender any
amount necessary to make up the deficiency in one or more payments as required by Le~tder.
Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrawer
any Funds held by Lender. lf under paragraph 19 the Property is sold or acquired by Lender, Lender shal! apply, no later
than immediate(y prior to the sale of the Property or its acquisition by Lender, any Funds held by Lender at the time oP
apptication as a credit against the sums secured by this Security Instrument.
3. Application oF Payments. Unless applicable law provides otherwise, all payments received by Lender under ~
paragraphs 1 and 2 shaU be applied: first, to late charges due under the Note; second, to prepayment charges due under the `
Note; third! to amounts payable under paragraph 2; Courth, to interest due; and last, to principal due. s
4, Charges; Liens. Borrower shalt pay all taxes, assessments, charges, fines and impositiuns attributable to the
Property which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any.
~3orroa~er shall pay these obligations in ihe manner provided in paragraph 2, or if not paid in that manner, Borrower shail
pay them on ti?ne directly to the person o«•ed pa~~ment. Borrower shal) promptly furnish to Lender all notices of amounts
~ to be paid under this paragraph. If Borrower makes these payments directly, ~orrower shali promptly furnish to Lender ~
i receipts evidencing the payments. • .
I3orrower shall promptiy discharge any Gen ~~hich has priority over this Security Instrument unless Borrower: (a) ~
` agrees in w~iting 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 lien or forfeiture of any part of the Property; or (c) seeures from the holder of the lien an
agreement satisfactory to Lender subordinating the tien to this Security Instrument. If Lender determines that any part of
the Property is subject to a tien which may attain priority over this Security Instrument, Lender may give Borrower a
notice identifying the 1ien. Borrower shal! satisfy thc lien or take one or more af the actions set forth above within !0 days
of the giving of notice.
5. Ha•rard Insurance. Borrower 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 far which Lender
4 requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The
~ insurance carrier providing the ii~surance shall be chosen by Bo~rower subject to Lender's approval which shall not be
unreasonably withheld. ~
!1 All insurance policies and renewals shal! be acceptable to Lender and shall include a standard mortgage clause. ,
I.endcr shall have the right to hold the policies and renewals. If Lender rQquires, Borrou•er shal! promptly give to Lender
; all receipts of paid premiums and renewal notices. In the event of toss, Barrower shall gtve prompt notice to the insurance ;
carrier and Lender. Lender may make proof of loss if not made ~romptly by Borrower. ~
Unless Lender and I3orrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair
of the Propert}• damaged, if the restoration or repair is economically feasible and Lender's security is not lessened. If the
restoration or repair is not economieally feasible or Lender's security woutd be tessened, the insurance proceeds shal! be
applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. If
Borro~~er abandons the Property, or dces not answer within 30 days a notice from Lender that the insurance carrier has ~
offered to settle a claim, then Lender may collect the insurance proceeds. Lender may use the proceeds to repair or restore ~
the Pr~perty or to pay sums secured by this Security Instrument, whether or not then due. The 30-day period wiU begin
wl~en the notice is given.
Unless Lender and E3orro~ver otherwise ageee in writing, any applieation of pr~eeeds ta principa! shall not extend or
postpone the due date of the monthly payments referred to in paragraphs 1 and 2 or change the amount of the payments. If
under paragraph 19 the Property is acyuired by Lender, Borrower's right to any insurance policies and proce~zds re~ulting
from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security
Instrument immediatel~ prior to the acquisition.
6. Preservation and Maintenance of Property; Leaseholds, Borrower shall not destroy, damage or substantialiy _
change the Property, allotv the Property to deteriorate or commit waste. If this Security Instrument is on a lease'hald,
Borrower shall comply with the provisions otthe lease, and if Borrower acquires fee title to the Property, the leasehold and
fee title s~all not merge unless Lender agrees to the merger in writing.
Protection of Lender's Rights in the Property; Mortgage Insurance. if Borrower fails to perform the
covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly aflect
Lender's rights in the Property (sueh as a proceeding in bankruptcy, probate, for condemnation or to enforce laws or
regulations), then Lender may do and pay f~r 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 over tt~is Security
Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to make repairs. Although ~
Lender may take action under this paragraph 7, Lender does not have to do so. ~
Any amounts disbursed by I.ender under this paragraph 7 shall become addi~ional 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 1Vote rate and shall be payable, svith interest, upon notice from Lender to Barrower
~ requestir~g payment. ~
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