TRUST DEED EXPLANATION (Actual content part
5)
4. Charges;
Liens.
Borrower shall pay all taxes, assessments, charges, fines, and impositions
attributable to the Property which can attain priority over this Security
Instrument, leasehold payments or ground rents on the Property, if any, and
Community Association Dues, Fees, and Assessments, if any. To the extent
that these items are Escrow Items, Borrower shall pay them in the manner
provided in Section 3.
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
acceptable to Lender, but only so long as Borrower is performing such
agreement; (b) contests the lien in good faith by, or defends against
enforcement of the lien in, legal proceedings which in Lender's opinion
operate to prevent the enforcement of the lien while those proceedings are
pending, but only until such proceedings are concluded; 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 can attain priority over this Security
Instrument, Lender may give Borrower a notice identifying the lien. Within
10 days of the date on which that notice is given, Borrower shall satisfy
the lien or take one or more of the actions set forth above in this Section
4.
Lender may require
Borrower to pay a one-time charge for a real estate tax verification and/or
reporting service used by Lender in connection with this Loan.
5. Property
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 including, but not limited to, earthquakes
and floods, for which Lender requires insurance. This insurance shall be
maintained in the amounts (including deductible levels) and for the periods
that Lender requires. What Lender requires pursuant to the preceding
sentences can change during the term of the Loan. The insurance carrier
providing the insurance shall be chosen by Borrower subject to Lender's
right to disapprove Borrower's choice, which right shall not be exercised
unreasonably. Lender may require Borrower to pay, in connection with this
Loan, either: (a) a onetime charge for flood zone determination,
certification and tracking services; or (b) a one-time charge for flood zone
determination and certification services and subsequent charges each time
remappings or similar changes occur which reasonably might affect such
determination or certification. Borrower shall also be responsible for the
payment of any fees imposed by the Federal Emergency Management Agency in
connection with the review of any flood zone determination resulting from an
objection by Borrower.
If Borrower fails
to maintain any of the coverages described above, Lender may obtain
insurance coverage, at Lender's option and Borrower's expense. Lender is
under no obligation to purchase any particular type or amount of coverage.
Therefore, such coverage shall cover Lender, but might or might not protect
Borrower, Borrower's equity in the Property, or the contents of the
Property, against any risk, hazard or liability and might provide greater or
lesser coverage than was previously in effect. Borrower acknowledges that
the cost of the insurance coverage so obtained might significantly exceed
the cost of insurance that Borrower could have obtained. Any amounts
disbursed by Lender under this Section 5 shall become additional debt of
Borrower secured by this Security Instrument. These amounts shall bear
interest at the Note rate from the date of disbursement and shall be
payable, with such interest, upon notice from Lender to Borrower requesting
payment.
All insurance
policies required by Lender and renewals of such policies shall be subject
to Lender's right to disapprove such policies, shall include a standard
mortgage clause, and shall name Lender as mortgagee and/or as an additional
loss payee and Borrower further agrees to generally assign rights to
insurance proceeds to the holder of the Note up to the amount of the
outstanding loan balance. Lender shall have the right to hold the policies
and renewal certificates. If Lender requires, Borrower shall promptly give
to Lender all receipts of paid premiums and renewal notices. If Borrower
obtains any form of insurance coverage, not otherwise required by Lender,
for damage to, or destruction of, the Property, such policy shall include a
standard mortgage clause and shall name Lender as mortgagee and/or as an
additional loss payee and Borrower further agrees to generally assign rights
to insurance proceeds to the holder of the Note up to the amount of the
outstanding loan balance.
In the event of
loss, Borrower 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 Borrower otherwise agree in writing, any insurance proceeds,
whether or not the underlying insurance was required by Lender, shall be
applied to restoration or repair of the Property, if the restoration or
repair is economically feasible and Lender's security is not lessened.
During such repair and restoration period, Lender shall have the right to
hold such insurance proceeds until Lender has had an opportunity to inspect
such Property to ensure the work has been completed to Lender's
satisfaction, provided that such inspection shall be undertaken promptly.
Lender may disburse proceeds for the repairs and restoration in a single
payment or in a series of progress payments as the work is completed.
Unless an agreement is made in writing or Applicable Law requires interest
to be paid on such insurance proceeds, Lender shall not be required to pay
Borrower any interest or earnings on such proceeds. Fees for public
adjusters, or other third parties, retained by Borrower shall not be paid
out of the insurance proceeds and shall be the sole obligation of Borrower.
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 the
excess, if any, paid to Borrower. Such insurance proceeds shall be applied
in the order provided for in Section 2.
If Borrower
abandons the Property, Lender may file, negotiate and settle any available
insurance claim and related matters. If Borrower does not respond within 30
days to a notice from Lender that the insurance carrier has offered to
settle a claim, then Lender may negotiate and settle the claim. The 30-day
period will begin when the notice is given. In either event, or if Lender
acquires the Property under Section 22 or otherwise, Borrower hereby assigns
to Lender (a) Borrower's rights to any insurance proceeds in an amount not
to exceed the amounts unpaid under the Note or this Security Instrument, and
(b) any other of Borrower's rights (other than the right to any refund of
unearned premiums paid by Borrower) under all insurance policies covering
the Property, insofar as such rights are applicable to the coverage of the
Property. Lender may use the insurance proceeds either to repair or restore
the Property or to pay amounts unpaid under the Note or this Security
Instrument, whether or not then due.
6. Occupancy.
Borrower shall occupy, establish, and use the Property as Borrower's
principal residence within 60 days after the execution of this Security
Instrument and shall continue to occupy the Property as Borrower's principal
residence for at least one year after the date of occupancy, unless Lender
otherwise agrees in writing, which consent shall not be unreasonably
withheld, or unless extenuating circumstances exist which are beyond
Borrower's control.
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