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UNIFORM COVENAN'['S. Bonower and Gende~ covenatft and ag~a as foUows:
1. P~ymeat ot Priacipat aad Intuat; Frepayment and Lte Cbugea. Borrower shall promptly pny when due
the principal of and interest on the debt evidenced by the Note and any prepapment ~nd late chergea due un~der the Note.
Z. ~bds tor Taxes and Iaaurance. Subjcct to applicable law or to a written waiver by Lende~, Borrower shall pay
to Lender on thc day monthly payments arc due under the Note~ until the Note is paid in fup~ a sum ("Funds") equa! to
one-twclflh of (a) yearly taxes and assessments, which may attain priority ovcr this Security Instrument; (b) yearly
leasehold payments or gcound rents on the Property, if any; (c) yearly hazard insuranct premiums; and (d) yearly
mortgage insurance premiums, if any. Thesc items arc called "escrow itcros." Lender may estimate the Funds due on the
basis of current data and ceasonable estimates of Puture escrow items.
The Funds shall be hetd in an institution the deposits or accounts of which are insured or guaranteed by a federal or
state agency (including I.ender if L.ender is such an institution). Lende~ shalt apply the Funds to pay the escrow items.
Lender may not charge for hotding and applying the Funds, analyzing the account or verifying the escrow items, unless
I.ender pays Borrower interest on the Funds and applicable law permits l.ender to make such a charge. Bor~ower and
Lender msy agree in writing that interest shall be paid on the Funds. Unless an agreement is made or applicable law
requires interest to be paid~ I.~ider shall not be required to pay Borcower any interest or eamings on the Funds. I.ender
shall give to 8onower, 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 a~e pledged as additional 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 shali be,
at Borrower's option~ either promptly repaid to Borrower or credited to Barrower on monthly payments of Funds. If the
amount of the Funds held by Lender is not suflicient to pay the escrow items when due~ Borrower shall pay to Lender any
amount necessary ta make up the deficiency in one or more payments as required by I.ender.
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 appiy, no later
than immediately prior to the sale of the Property or its acquisition by Lender, any Funds hetd by Lender at the time oP .
application as a credit against the sums secured by this Security Instrument.
3. Appiicatiort of Payments. Unless applicable law provides otherwise, all payments received by I.ender 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; Liens. Bonower shall pay all taxes~ assessments, charges~ fines and impositions attributable to the
Property wt~ich may attain priority over this Security Instrument, and teasehold payments or grovnd rents, if any.
Borrower sha11 pay these obligations in the manner provided in paragraph 2, or if not paid in that manner, Borrower shall
pay them on time directly to the person owed payment. Bonower shall promptly furnish to Lender all notices of amounts
to be paid under this paragraph. If Borrower makes these payments directly, Bonower shall promptly furnish to Lender
receipts evidencing the payments.
Bonower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a)
agrees 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 lien 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, I.ender may give Borrower a
notice identifying the 1ien. Borrower shall sat+sfy the lien or take one or more of the actions set forth above within ]0 days
of the giving af notice.
5. Hazard Insurance, Borcower shall keep the improvements now existing or hereafter erected on the Property
insured against loss by fire~ hazards included within the term "eatended coverage" and any other hazards for which Lender
requires insurance. This insurance shall t~e maintained in the amounts and for the periods that I.ender requires. The
# insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be
unreasonably withheld.
; All insurance policies and renewals shall be acceptable to Lender and shall include a standard mortgage clause.
` I.ender shall have the right to hold the policies and renewals. If I.ender requires, Borrower shall promptty give ta Lender
~ all receipts of paid premiums and renewal notices. In the event ot ioss, Borrower shall give prompt notice to the insurance
carrier and Ler.der. L.ender may make proof of loss if rtot made promptly by Borrower.
Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair
of the Property damaged, if the restoration or repair is economically feasible and I.ender's security is not lessened. If the
restoration or repair is not economically feasible or Lender's security wouid be lessened, the insurance praceeds shaU 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 d+oes not answer within 30 days a nvtice from Lender that the insurance carrier has
offered to settle a claim, then Lender may collect the insurance proceecis. 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 L.ender and Bonower otherwise agree in writing, any application of proceeds to principal 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 acquired by Lender, Borrower's right to any insurance policies and proceeds resulting
from damage to the Property prior to the acquisition shaU pass to L.ender to the extent of the. sums secured by this Security
Instrument immediately prior to the acquisition:
6. Preservation and Maintenance of Property; Leaseholds. Borrower shall not destroy, damage or substantially
change the Property, aitow the Property to deteriorate or commit waste. If this Security Instrument is on a leasehold.
Borrower shalt compty with the provisior~s of the lease. and if Borrower acquires fee title to the Property, the leasehold and
fee title sha!! not merge unless Lender agrees to the merger in writing.
7. 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 legat proceeding that may significantly affect
Lender's rights in the Property (such as a proceeding in bankruptcy. probate, for condemnation or to enforce laws or
regulations), then Lender may do and pay for whatever is necessary to prottct the value of the Property and L.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
Instrument, appearing in court. paying reasonable attorneys' fees and entering on the Property to make repairs. Althoug6
Lender may take action under this paragraph 7, Lender dces not have to do so.
Any amounts disbursed by Lender under this paragraph 7 shali become additional debt of Borrower secured by this
Security Instrument. Unless Bottower and Lender 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 I.ender to Borrower
requ~sting payment.
gooK 5~9 Pa~E 925