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UN~FORt+~t CovEN~Nrs. 8orrower and Lender covenant and agrec as follows: ,
1. Paymeat of PrincipAl ~nd Interest; Prepaymeat And I.Ate Cfiarges. Borrower shall promptly pay when due ;
the principai of and interest on th~ debt evidenced by the Note and any prepayment and late charges due under the Note. ~
2. ~nds l~or Taxea ~nd Insurw~ce. Subject to applicable law or to a written waiver by l.ender. Bor~ower shall pay
to Lender an the day monthly payme~ts art duc unde~ the Note, until thc Note is paid in full, a sum ("Funds") equal to
one-tweifth of: (a) yearly taxes and assessments which may attain priority over this Security lnstrument; (b) yearly
leasehold payments or ground rents on the Property~ if any; (c) yearly hazard insurance premiums; and (d) ycarly
mortgage insurance premiums~ if any. These items are called "escrow items." Lender may estimate the Funds due on the
b~sis of current data and ~easonablc estimates of future escrow items.
The Funds shali be held in a~ institution the deposits or accounts of which are insured or guaranteed by a federal or
state agency (including I.ender if Lender is such an institution). Lender shall apply the Funds to pay the escrow items. ~
k.ender may not chargt for holding and applying the Funds~ analyzing the account or verifying the escrow items~ untess
Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. Borrower and ~
Lender may agree in writing that interest shall be paid on the Funds. Unl~.ss an agreement is made or applicable law
requires interest to be paid, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Lender
shall give to Borrower~ without charge, an annual accounting oPthe Funds showing credifs 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 Security Instrumcnt.
If the amount of the Funds hetd by Lender~ together with the future monthly payments of Funds payable prior to
the due dates of the escrow items~ shall excred tht amount required to pay the escrow items when due, the excess shall be,
at Borrower's option, either promptly rspaid to Bonower or credited to Borcower on monthly payments of Funds. If the ~
amount of the Funds held by I.ender is not sufC'icient to pay thc escrow items when due~ Honower shall pay to Lender any ~
amount neceesssary to make up the defieiency in one or more payments as required by I.ender. €
Upon payment in full of all sums secured by this Security Instrument, I.ender shall promptly refund to Borrower
any Funds held by Lender. If ander paragraph 19 the Property is sold or acquired by I.ender~ Lender shall apply~ nc, later
than immediately prior to the sale of the Property or its acquisition by Lender, any Funds held by I.ender at the time of
application as a credit against the sums secured by this Security Instrument.
. 3. Applicatioa of Payments. Unless applicable law provides otherwise, ali payments received by I.ender under
paragraphs 1 and 2 shall be applied: first, to late charges due under the Note; socond~ to prepayment charges due under the
lVote; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due. ~
4. C6srges; Liens. Borrower shall pay all taxes, assessments, charges, 6nes and impositions attributable to the
Property which may attain priority over this Security Instrument, and l~asehold payments or ground rents, if any. ;
Borrower shall 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. Bortower shafl promptly fvrnish to I.ender a!1 notices of amounts
to be paid under this paragraph. If Borcower makes these payments directly, Borrower 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~ (egal proceedings which in the Lender's opinion operate to ~
prevent the enforcement of the lien or forfeiture oP 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 give Borrower a
notice identifying the lien. Borrower shall satisfy the lien or take one or more of the actions set forth abave within ]0 days
of the giving of notice.
S. Hazard Iasurance. Borrower shall keep the improvements now eaisting or hereafter erected on the Property
~ insured against loss by fire, hazards included within the term "extended coverage" and any other hazards for whi~h I.ender
requires insuran~e. This insurance shall be maintained in the amounts and for the periods that I.ender requires. T6e
insurance carrier providing the insurance shali be chosen by Bonower subject to L.ender's approval which shall not be
unreasonahly withheld.
All insurance poiicies 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 promptly give to I.ender
all receipis of paid premiums and renewal notices. In the event of loss, Bonower shall give prompt notice to the insurance
carrier and Lender. Lender may make proof of' loss if not made promptly by Borrower.
Unless Lender and Bonower other~vise agree in writing, insurance praceeds sha11 be applied to restoration or repair
of the Property damaged, if the restoration 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
! Bottower abandons the Property, or dces not answer within 30 days a notice from I.ender that the insurance carrier has
j oflered to settle a claim, then Lender may collect the insurance proceeds. 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 I.ender and Borrower 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 Lender. Borrower's right to any insurance polici~s and proceeds resulting ,
from damage to the Property prior to the acquisition st?a11 pass to L,ender to the extent of the sums secured by this Security ;
Instrument immediately prior to the acquisition.
6. Preservation end Matntenance of Property; Lesseholds. Borrower shall not destroy, damage or substantially i
change the Property, allow the Property to deteriorate or commit wasie. If this Security Instrument is on a leasehold,
Borrower shali comply with the provisions of the lease, and if Bonower acquires tee title to the Property, the leasehold and
fee title shall not merge uniess 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 legal proceeding that may significantly affect
I.ender's rights in the Property (such as a proceeding in bankruptcy, probate. for condemnation or to enforce laws 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. 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. Although
Lender may take action under this paragraph 7, Lender dces 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 Borrower and Lender agree to other terms of payment, these amounts shali bear interest from
the date of disbursement at the Note rate and shall be payabte, with interest, upon notice from Lender to Borrower I
requesting payment.
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