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UNIFORM CovEN~NTS. Bonrowcr and Lender covenant and agrcc as follows: ~
1. Paymeat ot Principai and Intere~t; P~epnyn~eat ~nd Late Charges. Borrower shail promptly pay when due
the principal otand interest on the debt evidencai by the Note and any prepayment and late charges due under the Note.
2. Funds for Tuces nad Iasurane~e. Subject to applicable law or to a written waiver by I.ender~ Borrower shall pay
to I.ef~de~ on the d8y monthly payments are due under the Note, until the Nate is paid in full, a sum ("Funds") cqual to
one•twelRh of: (a) yearly taxes and assessmenis which may attain priority over this Security tnstrument; (b) yearly
leasehold paymertts or ground rents on thc Property~ if any; (c) yearly hazard insurancc premiums; and (d) yearly
' mortgage insurance pnmiums, if any. These items are caited "excrow items." I.ender may estimate the Funds due on the i
basis of current data and re~sonable estimates of future escrow items. ~
The Funds shall be held in an institution the deposits or accounts of which are insured orguaranteed by a fcderal or .
~ state ag~ncy (including I.ender if Lender is such an institution). Lender shall apply the Funds to pay the escrow items.
. I,endtr may not charge for holding and applying the Funds, analyzing the account or verifying the escrow items, unless ;
~ Lcnder pays Borrowcr interest on the Funds attd applicable law permits Lender to make such a charge. Borrower and ;
I.ender may agree in writing ihat interest shal) be paid on the Funds. Unless an agreement is made or applicable law €
' requires interest to be paid, I.ender shall not be required to pay Borrower any interest or earnings on the Funds. I.ender ~
' shall give to Bonower, without charge, an annual accounting of the Funds showing credits and debits to the Funds and the
• purpose for which each debit to the Funds was made. The Funds are ptedged as additionaf security for the sums secured by
this Security Instrument.
~ If the amount of the Funds held by Lender, together with the future monthly payments of Funds payable prior to
~ the due dates of the escrow items, shall exceed the amount required to pay the escrow items when due, the excess shall be, '
at Bonower's option, either promptly repaid to Bonower or credited to Bonower on monihly payments of Funds. Ii the
~ amount of the Funds held by I.ender is not suf~'icient to pay the escrow items when due, Borrower shal! pay to Lender any
o amount necessary to make up the deficiency in one or more payments as required by Lender.
~ Upon payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower
any Funds held by Lender. If under paragraph 19 the Property is sold or acquired by Lender, Lender shall apply, no later
than immediately prior to the sale of the Property or its acquisition by Lender, any Funds held by Lender at the time of
application as a credit against the sums secured by this Security Instrument.
3. Appl~catioa of Payments. Unless applicable Iaw provides otherwise, all payments received by Lender under ~
paragraphs 1 and 2 shall 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; fourth, to interest due; and last. to principal due. ~
4. Charges; Lieos. Bonawer shall pay all taxes. assessments, charges~ fines and impositions attributable to the
Property which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any. ~
Borrower shalt pay these obligations in the manner providerl in paragraph 2, or if not paid in that manner, Borrower shall
pay ihem on time directly to the per~on owed payment. Bonower shall promptiy furnish to L.ender all notices of amounts f~
to be paid under this paragraph. If Bonower makes these payments directly, Borrower shall promptly furnish to Lender
receipts evidencing the payments. '
Borrower shall promptly discharge any lien which has priority over this Security Insirument unless Borrower: (a) ~
agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to I.ender; (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 enforcemeni of the lien or forfeiture of any part of the Property; or (c) secures from the holder of the tien an
agreement satisfactory to Lender subordinating the lien to this Security Instrument. If I.ender determines that any part of
the Property is subject to a Iien which may attain priority over this S~urity Instrument, Lender may give Bonower a
notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth above within 10 days
of the giving of notice.
S. Hazard Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property
insured against loss by fire, hazards included within the terni "eztended coverage" and any other hazards for which Lender
requires insurance. This insurance shall be maintained in the amounts and far the periods that I.ender requires. The
insurance carrier providing the insurance shall be chosen by Borrower subject to I.ender's approval which shall not be
unreasonably withheld.
All insurance policies and renewals shall be acceptable to I.ender and shall include a standard mortgage clause.
Lender shall have the right to hold the policies and renewals. If L,ender requires. Borrower shal! promptly give to Lender
al( receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurance _
carrier and I,ender. Lender may make proof of loss if not made promptly by Bonower.
Unless Ixnder and Borcower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair ~
of the Property damaged, if the restoration or repair is economically feasibte 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, wheiher or not then due, with any excess paid to Borrower. If
Borcower 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 I,ender may collect the insurance proceeds. Lender may use the proceeds to repair or restore
lhe Properiy 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 Borcower otherwise agree in writing, any application of proceeds to principal shall not extend or
postpone the due date of the monthly payments refened to in paragraphs 1 and 2 or change the amount of the payments. If
under paragraph 19 the Property is acquired by L.ender, Borrower's right to any insurance policies and proceeds resuiting
from damage to the Property prior to the acquisition shall pass to Lender to the extent of the sums secured by this Security ~
Instrument immediately prior to the acquisition. ~
6. Preservation aad Maintertance of Property; I.easeholds. Borrower shall not destroy, damage or substantially ~
change the Property, allow the Property to deteriorate or commit wast~. If this Security Instrument is on a leasehold,
Borrower shall comply with the provisions of the tease, and ii Borrower acquires fee title to the Property, the leasehold and
fee title shall not merge unless Lender agrees to the merger in writing.
7. Protection of Lender's Rlghts in the Property; Mortg~ge Insurance. If Borrower fails to perform the
covenants and agreements contained in this Seeurity Instrument, or there is a legal proceeding that may significantly affect
I; I.ender's ri hts in the Pro rt such as a roceedin in bankru tc , robate, for condemnation or to enforce laws or
B Pe Y t P 8 P Y P
I regulations), then Lender may do and pay for whatever is necessary to protect the value of the Property and I.ender's rights ~
in the Property. I.ender's actions may include paying any sums secured by a lien which has priority over this Security ~
Instrum~nt, appearing in court, paying reasonabte 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 Lender under this paragraph 7 shall become additional debt of Borrower secured by this ~
Security Instrument. Unless Bonower and L.ender agree to other terms of payment, these amounts shall bear interest from ~
the date of disbursement at the Note rate and shall be payable, with interest, upon notice from L,ender to Borrower
requesting payment. i'~-
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