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U"~1FORM COVk\A'~TS Burruwer and Lender cuvenant ~nd agtrr as folloH~:
1. Paymeot of Principal and Interest; Prepay~ment and l.ate Charges. AorroNer shall promptly ra~ whrn due
the principal of and interest un the debt evidenced by the Note and any prepaymrnt and late charge~ due undrr the Note.
2, Funds fo~ Tazes and Insurance. Sub~ect to appt~cable law or to a wntten w~ai~er by~ Lender, Rorrow~er ~hal! pay
to Le~der on the day monthly payments arr due under ~he Nole, unti! the Note ~s paid in full, a sum ("Funds") equa) to
one-lwelfth of: (a) yearly taxes and assessme~ts which may attain priority over this Security lnstrument; (b) yearly
leasehold payments or ground rents an the Property, 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
basis of current data and reasonable estimates of future escrow items.
The Funds shalt be hetd in an i~titution the deposits or accaunts of whieh are insured or guaranteed b~• a federal or
,tate agency (including l.ender if l.ender is such an institution). lxnder shall apply the Funds to pa~• the escrow items. Lender
ma~• not charge for holding and applying the I=unds, analyzing the account or verifying the escrow items, unless Lender paps
Elorrow~er interest on the Funds and applicable law permits l,ender to make such a charge. A charge assessed by Lender in
connection ~~ith Borrow~ers' entering into this Security Instrument to pay the cost of an independent tax reporting service
~hal! not be a charge for purposes of the preoeding sentence. BorroK•er and l.ender ma~• agree in writing that interest shaA be
paid on the Funds. Unless an agreement is made or applicable law reyuires interest to be paid, Lender shall not be reyuired to
pa}~ Borrou•er an~~ interest or earnings on the Funds. lxnder shall gi~•e to Borrower, withoul 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 pledged as adciitionat securit~~ for the sums secured by this Security Instrument.
If the amount of the Funds held by L,ender, together with the future monthly payments of Funds payabte prior to
the due dates oithe escrow items, shail exceed the amount required to pay the escrow items when due, the excess shall be,
at Borrower's option, either promptly repaid to Borrower or credited to Borrower on monthly payments of Funds. If the
amount of the Funds held by Lender is not sufY'icient to pay the escrow items when due, Borrower shall pay to I.ender any
amount necessary to make up the deficiency in one or more payments as required by Lender.
Upon payment in full of aU sums secured by this Security Instrument, [.ender shalt promptiy retund to Borrower
any fiunds held by Lender. IPunder paragraph 19 the Property is sofd or acquired by Lender, Lender shall 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 of
application as a credit against the sums secured by this Security Instrument.
3, Applicatioa of Payments. Unless applicabie law provides otherwise, all payments received by Lender under
paragraphs 1 and 2 shali be applied: first, to late charges due under the Note; second, to prepayment c6arges due under the
Note; third, to amounts payable under paragraph 2; fourth, to interest due; and last, to principal due.
4. Charges; Liens. Borrower st~a11 pay all taxes, assessments, charges, fines and impositions attributable to the
Properiy which may attain priority over this Security Instrument, and leasehold payments or ground rents, if any.
Borrower shall pay these obligations in the manner providec! in paragraph 2, or if not paid in that manner, Borrower shall
pay them on time directly to the person owed payment. Borrower shall promptly furnish to Lender all notices of amout~ts
to be paid under this paragraph. If Borrower makes these payments directly, Borrow~r shalf promptly furnish to I.ertder
receipts evidencing the payments.
Borrower 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 ac:eptable 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 oi'the tien an
agreement satisfactory to Lender subordinating the lien to this Security Instrament. If Lender determines that any Part of
the Property is sabject to a lien which may atiain priority over this Security Instrument, Lender may give Borrower a
notice identifying the tien. Borrower shalt satisfy the lien or take one or more of the actions set torth above within 10 days
of the giving of notice.
5. Hazard Insurance. Borrower shall keep the impravements now existing or hereaRer erected on the Property
insured against loss by fire, hazards inciuded within the term "extended coverage" and any other hazards for which Lender
requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The
insurance carrier providing the insurance shall be chosen by Bo~rower 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 ctause.
L,ender shall have the right to hold the policies and renewats. If Lender requires. Borrow~er shall prompt~y give to Lender
ail receipts of paid premiums and reRewal notices. In the event of loss, Borrower shall gi~~e prompt notice to the insurance
carrier and Lender. I,ender may make proof of loss if not 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 Lender's security is not lessened. if the
restoration or repair is not economically feasibte or Lender's security would be tessened, the insurance proceeds shal) be
applied to the sums secured by this Security Instrument, whether or not ihen due, with any excess paid to Borrower. If
Borrower abandons the Property, or does not answer within 30 days a notice frum Len~er that the insurance carrier has
offered to settle a claim, then L.ender may collect the insurance proceeds. Lender ma~ 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 prineipa! shall not extend or
postpone tt~e 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 shall pass to Lender to the extent of the sums secured by this Security
Instrum~nt immediately prior to the acquisition.
6. Preserration and Maintenance of Property; Le~seholds. 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 of the lease, and if Borrower acquires fee title to the Property, the leasehold and
fee title shall not merge unless L.ender agrees to the merger in writing.
Protection of I.ender's Rights in the Property; Mortg$ge Insurance. If Borrower faits to perform the
covenants and agreements contained in this Security Instrument, ar there is a legal proceedir~g that may significantly ali'ect
Lender'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. L.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 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 Instrumrnt. Unless Borrower and Lender agrce to other terms of payment, these amounts shall bear interest from
the date of disbursement at ihe Note rate and shall be payable, with interest, upon notice from Lender to Borrower
requating payment.
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