Loading...
HomeMy WebLinkAbout896034Return To: Prepared By: FIELDSTONE MORTGAGE COMPANY 11000 RO, EN COLUMBIA, MD 21044 __PR PAGE(~ KATHY CRISP FIELDSTONE MORTGAGE COMPANY ~E¢..,EIVED LIFqCC,._,.~ CC, L/i'J'-'FY OLERK ]Space Above This Line For Recording Data] .MORTGAGE M1N 100052606860976199 ,, Z/ DEFINITIONS Words used in multiple sectiOns of this document are defined below and other words are defined in Sections 3, 11, 13, 18, 20 and 21. Certain rules regarding the usage of words nsed in this document are also provided in Section 16. (A) "Security Instrument" means this document, which is daled December 12, 2003 , together with all Riders lo this document. (B) "Borrower" is KEVIN MERRITT AND BILLIE JO MERRITT,, HUSBAND AND WIFE ,/~ ,L,, Borrower is the mortgagor nnder lhis Security Insh'ument. (C) "MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the mortgagee under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, FLint, MI 48501-2026, tel. (888) 679-MERS. WYOMING-Single Family-Fannie Mae/Freddie (~®-6A(WY) (0005) . Page ' of 15 Initials: ~ . VMP MORTGAGE FORMS - (800)521-7291 ' ~ Mac UNIFORM INSTRUMENT WITH MERS Form 3051 1/01 °71 (D) "Lender" is FIELDSTONE MORTGAGE COMPANY Lender is a CORPORATION organized and existing nnder the laws of MARYLAND Lender's address is 11000 BROKEN LAND PKWY, #600 COLUMBIA, MD. 21044 (E) "Note" means the promissory note signed by Borrower and dated December twelfth 2003 · The Note states lhat Borrower owes Leader ' ONE HUNDRED FORTY EIGHT THOUSAND FIVE HUNDRED & 00/100 Dollars (U.S. $ 148,500.00 ) plus inlerest. Bon'ower has promised to pay this debt in regular Periodic Payments and to pay the debt in Rill not later than JANUARY 1, 2034 (F) "Property" means the property that is described below under the heading "Transfer of Rights in the Property." (G) "Loan" means the debt evidenced by the Note, pins interest, any prepayment charges and late charges due tinder the Note, and all sullls due tinder this Security Instrument, plus interest. (H) "Riders" means all Riders to this Security Instrument that are executed by BorrOwer. The following Riders are to be executed by Borrower [check box as apphcable]: ~-~ Adjustable Rate Rider ~ Condominium Rider ~ Second Home Rider [-~ Balloon Rider [] Planned 'Unit Development Rider [--] 1-4 Fanfily Rider [--] VA Ride,' [-~ Biweekly Payment Rider ~] Other(s) [specify] (I) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions. (J) "Community Association Dues, Fees, and Assessments" means all dues, fees, assessments and other charges that are imposed on Bon'ower or the Property by a condonfinium association, homeowners association or sinfilar organization. (10 "Electronic Funds Transfer" means any transfer of hinds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to' order, il~slruct, or authorize a financial institution to debit or credit an account. Such teton includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and aotomated clearinghouse transfers. (L) "Escrow Items" means those items that are described in Section 3. (M) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid nnder the coverages described in Section 5) for: (i) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in hen of condemnation; or (iv) nfisrepreseatations of, or omissions as lo, the value and/or condition of the Property. (N) "Mortgage Insurance" means insurance protecting Lender against the nonpayment of, or de£ault on, the Loan. (O) "Periodic Payment" means the regularly scheduled amount doe for (i) principal and interest tinder the Note, plus (ii) any amounts under Section 3 of this Secnrity Instrument. (P) "RESPA" means the Real Estate Settlement Procedures Act (12 U.S.C. Section 2601 et seq.) and its implementing regulation, Regulation X (24 C.F.R. Part 3500), as they might be amended fi'om time to time, or any additional or snccessor legislation or regain,ion that governs the same subject matter. As nsed in this Security Instrnment, "Pd~SPA" refers to all requi,'ements and restrictions that are imposed in regard'to a "federally related mo,'tgage loan" even if the Loan does not qualify as a "federally related' mortgage loan" tinder RESPA. Form 3051 1101 "72 o8 15oa4 (Q) "Successor in Interest of Borrower" means any parly that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. TRANSFER OF RIGHTS IN THE PROPERTY This Security Instrument secnres to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Iastrun~ent and the Note. For this purpose, Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS, with power of sale, the following described property located in the COUNTY of Lincoln [Type of Recording Jurisdiction] [Name of Recording Jurisdiction] LOT 4 OF THE WEST THAYNE. SUBDIVISION TO THE TOWN OF THAYNE, LINCOLN COUNTY, WYOMING AS DESCRIBED ON THE OFFICIAL PLAT THEREOF. ParcellD Number: 375 HEAP DRIVE THAYNE ("Proper~ Address"): 1234192320000400 which ct, rrently has the address of [Street] [City] , Wyonfing 83127 [Zip Code] TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and ftxtures now or hereafter a part of' the property. All replacements and additions shall also be covered by lhis Security Instrnment. All of the foregoing is referred to in this Security Instrument as the "Property." Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Secnrity Instrument, but, if necessary to comply with law or custom, iVIERS (as nonfinee for Lender and Lender's successors and assigns) has tile right: to exercise any or all of those interests, inqluding, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument. BORROWER COVENANTS that Borrower is lawfully seised of the eslate hereby'conveyed and has the right to mortgage, grant and convey tile Property and that the Property is unencumbered, excepl encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. . THIS SECURITY INSTRUMENT combines uniform covenants for national nsc and non-unifo{m covenants with limited variations by jurisdiction to constitnte a uni£orm security instrument covering real property. Initials: Form 3051 1101 0686097619 2?3 UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: . 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any prepayment charges and late charges dne under the Note. Borrower shall also pay fimds for Escrow Items pursuant to Section 3. Payments dne under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Secority Instrument is returned to Lender unpaid, Lender may requh'e that any or all subsequent payments due under the Note and this Secnrity instrument be made in one or more of the following forms, as selected by Leoder: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal a'gency, insmtmentality, or entity; or (d) Electronic Funds Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 15. Lender may retm'n any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan cun'ent, without waiver of any rights hereunder or prejudice to its rights to refnse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. It' each Periodic Payment is applied as of its scheduled due date, then Lender need not pay interest on unapplied fnnds. Lender may hold such unapplied fimds until BOrrower makes payment to bring the Loan current. If Bon'ower does not do so within a reasonable period of lime, Lender shall either apply snch funds or return them to Bon'ower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note itmnediately prior to foreclosnre. No offset or claina which Borrower might have now or in the future against Lender shall relieve Borrower fi'om nmking payments dne nnder tl~e Note. and this Security Instrument or pex'fbrnfing the covenants and agreements secured by this Security Instrument. 2. Al~plieation of Payments or Proceeds. Except as Otherwise described in this Seclion 2, all payments accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) principal dne under the Note; (c) amounts due onder Section 3. Snch payments shall be applied to each Periodic Payment in the order in ~vhich it became due. Any remaining amounts sball be applied first to late charges, second to any other amounts due under this Security Instrument, and lben to reduce the principal balance of the Note. If Lender receives a payment fi'om Borrower for a delinqnent Periodic Payment which includes a snfficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received fi'om Bon'ower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the fidl payment of one or more Periodic Paymen.ts, snch excess may be applied to any late charges due. Voluntary prepayments shall be applied fin'st to any prepayment charges and then as described in the Note. Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due nnder the Note shall not extend or postpone the due date, or change lhe amount, oflhe Periodic Payments. 3. Funds for. Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are due under the Note, nntil the Note is paid in full, a stun (the "Funds") to provide for payment of amounts dne for: (a) taxes and assessments and other items which can attain priority over this Security Instrnment as a lien or encumbrance on the Property; (b) leasehold payments or gronnd rents on the Property, if any; (c) preminms for any and all insurance required by Lender nnder Section 5; and (d) Mortgage Insurance premit, ms, if any, or any snms payable by Borrower to Lender in lien of the payment of Mortgage Insnrance premiums in accordance with the provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term of the Loan, Lender may reqnire that Community Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under Ibis Section. Borrower shall Pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Fnnds for any or all Escrow Items. Lender nmy waive Borrower's obligation to pay to Lender Fnnds for any or all Escrow Items at any time. Any snch waiver may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, 'the amounts due for any Escrow Items fbr which payment of (~-6A(WY) (0005) Form 3051 1101 0686097619 ' 08DGO, 4 2 74 Fnnds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment within snch time period as Lender may reqnire. Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to be a covenant and agreement contained in this Secnrity Instrnment, as the phrase "covenant and agreement" is nsed in Section 9. If Bon'ower is obligated to pay Escrow Items directly, pursoant to a waiver, and Bon'ower fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay snch amount and Borrower shall then be obhgated under Section 9 to repay to Lender any snch amonnt. Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15 and, upon such revocation, Bon'ower shall pay to Lender all Funds, and in such amounts, that are then reqnired under this Section 3. Lender may, at any time, collect and hold Funds in an amonnt (a) sufficient to permit Lender to apply the Fnnds at the time specified nnder RESPA, and (b) not to exceed the maximum amount a lender can reqnire under ICESPA. Lender shall estimate the amount of Fnnds due on the basis of current data and reasonable estimates of expenditures of futnre Escrow Items or otherwise in accordance with Applicable Law. The Funds shall be held in an institotion whose deposits are insured by a federal'agency, instrumentality, or entity (inclnding Lender, if Lender is an institution whose deposits are' so insured) or in any Federal Ho~ne Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law pernfits Lender to make such a charge. Unless an agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender can agree in ~vriting, however, lhat interest shall be paid on the Fnnds~ Lender shall give to Borrower, without charge, an anmtal accounting of the Fnnds as required by RESPA. If there is a surplus of Funds held in escrow, as defined under RESPA, Lender shall accoont to Borrower for the excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined nnder RESPA, Lender shall notify Borrower as requh'ed by ILESPA, and Borrower shall pay to Lender the amOont necessary to make up the shortage in accordance with RESPA, but in no more than 12 monthly payments. If there is a deficiency of Funds held in escrow, as defined under ILESPA, Lender shall notify Borrower as reqnired by RESPA, and Borrower shall pay to Lender the amount necessary to make np the deficiency in accordance with RESPA, but in no more than 12 monthly payments. Upon payment in full of all snms secured by this Security Instrument, Lender shall promptly refund to Borrmver any Funds held by Lender. 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, leasel'~old 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 sliall pay them in the manner provided in Section 3. Borrower shall promptly discharge any lien which has priority over this Security Instrument nnless Borrower: (a) agrees in writing to the payment of lhe obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is perlbrming such agreement; (b) contests the lien in good lhith 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 ouly until such proceedings are concluded; or (c) secnres fi'om the holder of the hen an agreement satisfactory lo Lender subordinating the lien to this Security Instrument. If Lender deternfines 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 Initials: )<. ~ (~-6A(WY) (0005) page5o~',5 _~, Form 3051 1/01 0686097619 0S96084 ,.? 75 days of the date on which that notice is given, Borrower shall satisfy the hen or take one or more of the actions set forth above in this Section 4. Lender may reqnire 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. Bdrrower 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 bruited to, earthqnakes and floods, for which Lender requires insurance. This insnrance shall be nmintained in the amonnts (including deductible levels) and for the periods that Lender requires. What Lender reqnh'es pursuant to the preceding sentences can change during the term of the Loan. The insnrance carrier providing the insnrance shall be chosen by Borrower subject to Lender's right to disapprove Bon'ower's choice, which right shall not be exercised um'easonably. Lender may reqnire Borrower to pay, in connection wi'lb this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone de,cretins,ion and certification services and subsequent charges each time remappings or sinfilar changes occur which reasonably might affect such detemfination 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 Bon'ower's expense. Lender is under no obligation to purchase any particolar 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 hability and nfight 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 conld 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 fi'om the date of disbursement and shall be payable, with snch interest, npon notice kom Lender to Borrower requesting payment. All insurance policies required by Lender and renewals of st,ch pohcies shall be subject to Lender's right to disapprove such policies, shall inch,de a standard mortgage clause, and shall name Lender as mortgagee and/or as an additiOnal loss payee. 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 premiun]s and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction ol; the Property, such policy shall include a standm'd mortgage clause and shall name Lender as mortgagee and/or as aa additional loss payee. Ia the event of loss, Borrower shall give prompt notice to the insurance can'ier and Lender. Lender ]nay nmke proof of loss if not made promptly bY BmTower. Unless Lender and Bon'ower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was reqnired by Lender, shall be applied to restoration or repah' of the Property, if' the restoration or repair is economically feasible and Lender's security is not lessened. During snch repair and restoration period, Lender shall have the right to hold st,ch insurance proceeds nntil Lender has had an opportnnity to inspect such Property to ensure ,be work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repah's and restoration in a single payment or in a sehes 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 pubhc adjusters, or other third parties, retained by Borrower shall not be paid out of the i~surance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's secnrity would be lessened, the insurance proceeds shall be applied to (~-6A(WY) tooos) Pa~e 6orlS Form 3051 1/01 0686097619 ,..76 the sums secnred by this Security Instrument, whether or not then due, with the excess, if'any, paid to Borrower. Snch insurance proceeds shall be applied in the order provided for in Section 2. If Borrower abandons the P~:operty, Lender may file, negotiate and setlle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice fi'om 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 othm'wise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount 'not to exceed the amounts nnpaid tinder the Note or this Security Instrument, and (b) any other of Bon'ower's rights (other than the right to. any refi~nd of unearned premiums paid by Bon'ower) tinder all insurance policies covering the Property, insofar as snch rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or reslore the Property or to pay 'amounts unpaid tinder the Note or this Security Instrnment, 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 execntion of this Security Instrument and shall contioue to occnpy the Property as Bon'ower's principal residence lbr at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or nnless extenuating circnmstances exist which are beyond Borrower's conla'ol. 7. Preservation, Maintenance aad Protection of the Property; Inspections. Borrower shall not destroy, damage or impah' the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower shall mainlain the Property in order to prevent the Property fi'om deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 5 that repair or restoration is not econotnically feasible, Borrower shall promptly repair the Property if damaged 1o avoid fnrther deterioration or damage. If insm'ance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible Ibr repairing or restoring the Property only if Lender has released proceeds fbr such purposes. Lender may disbnrse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient lo repair or restore the Property, Borrower is not reheved of Borrower's obhgation for the completion of such repair or restoration. Lender or its agent may make reasonable entries upon and inspeclions of the Properly. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time Of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Applic:ttion. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurale information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan. Material representations include, but are not lm-fited to, representations concerning Bon'ower's occupancy of the Property as Bon-ower's principal residence. 9. Protection of Lender's Interest in the Property :md Rights Under this Security Instrnment. If (a) Borrower fifilS to perform the covenanls and agreements contained in this Security Instrument, (b) there is a legal proceeding that n'fight significantly affect Lender's interest in the Property and/or rights under this Security Instrmnent (such as a proceeding in bankrnptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over Iris Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Properly, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the vahte of the Property, and securing and/or repah'ing the Property. Lender's actions can include, bnt are not limited to: (a) paying any sums secured by a lien which has priority over iris Secnrity Instrument; (b) appearing in courl; and (c) paying reasonable (~-6A(WY) (ooo5) Initials:. Page 7 of 15 Form 3051 1/01 OS GO,.q4 0686097619 77' attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secnred position in a baukd'uptcy proceeding. Securing the Property includes, but is not linfited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have ntililies turned on or off. Although Lender may take actlon nnder this Section 9, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions attthorized under this Section 9. Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Secnrity Instrument. These amounts shall bear interest at the Note rate fi'om the date of disbursement and shall be payable, with such interest, upon notice fi'om Lender to Borrower reqnesting payment. If this Security Instrument is on a leasehold, Borrower shall comply with all the Provisions of the lease. If Borrower acquires fee title tc the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 10. Mortgage Insurance. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower shall pay the prenfim:ns requh'ed to maintain the Mortgage Insurance in effect. If, for any reason, the Mortgage Insurance coverage required by Lender ceases to be available fi'om the mortgage insurer that previonsly provided snch insurance and Bon'ower was required to make separately designated payments toward the preminms for Mortgage Iasnrance, Borrower shall pay the premiums reqnired to obtain coverage snbstantially eqnivalent to the Mortgage Insnrance previously in effect, at a cost substantially equivalent to the cost to Borrower o£ the Mortgage Insurance previously in effect, fi'om an alternate mortgage insurer selected by Lender. If snbstautially equivalent Mortgage Insnrance coverage is not available, Borrower shall continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use and retain these payments as a non-refundable loss reserve in lien of Mortgage Insnrance. Such loss reserve shall be noa-refimdable, notwithstanding the fact that the Loan is nltimately paid in £ull, and Lender shall not be reqoired to pay Borrower any interest or earnings on such loss reserve. Lender can no longer requh'e loss reserve payments if Mortgage Insurance coverage (in the amount and roi' the period that Lender requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender reqnkes separately designated payments toward the premiums for Mortgage Insnrance. If Lender required Mortgage insurance as a condition of making the Loan and Borrower was required to make separately designated payments toward the prenfiums fol' Mortgage Insnrance, Borrower shall pay the premimns required to maintain Mortgage Insurance in e£fect, or to provide a non-refi, ndable loss reserve, until Lender's requirement for Mortgage insurance ends in accordance with any written agreement between Borrower and Lender providing for such temfination or until termination is requh'ed by Applicable Law. Nothing in this Section 10 affects Borrower's Obligation to pay interest at the rate provided in the Note. Mortgage Insurance reimburses Lender (or any entity that purchases the Note) for certain losses it may incur if Borrower does not repay tile Loan as agreed. Borrower is not a palty to Ihe Mortgage Insurance. Mortgage insurers evaluate their total risk on all, such insurance in force fi'om time to time, and may enter into agreements with other parties that share or modify their risk, or redace losses. These agreements are on terms and conditions that are satisfactory to the mortgage insurer and the other party (or parties) to these agreements. These agreements may require the mortgage insurer to make payments using any source of funds that tile mortgage insurer may have available (which may include £unds obtained kom Mortgage Insnrance premioms). As a resnlt of these agreements, Lender, any pnrchaser of the Note, another insnrer, any reinsnrer, any other entity,'or any affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive from (or ]night be characterized as) a portion of Bon:ower's payments for Mortgage Insurance, in exchange for Sharing or modifying the mortgage insnrer's risk, or redncing losses. If such agreement provides that an a£filiate of Lender takes a share of the insorer's risk in exchange for a share of the premiums paid to the insurer, the arrangement is o£ten termed "captive reinsurance." Further: (a) Any such :lgreements will ]lot affect tile amonnts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of tile Loan. Such agreements will not increase the amotmt Borro~ver will owe for Mortgage Insnrance, and they will not entitle Borrower to any refnnd. Initials: ~., .t~ ~1~-. {~A(WY) t0005) Page 8 of 15 ~ Form 3051 1/01 0686097619 (h) Any such agreements will not affect tile rights Borrower has - if any - With respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 or any other law. These rights may include tile right to receive certain disclosures, to request and obtain c:mcellation of the Mortgage Insnrance, to have tile Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance prelniums that were unearned at the time of snch cancellation ar termination. 11. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned lo and shall be paid to Lender. If the Property is damaged, such Miscellaneons Proceeds shall be applied to restoration or l'epair 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 Miscellaneous 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 pay for the repairs and restoration in a single disbursement 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 Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repah' is not econon-fically feasible or Lender's secnrity would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, wilh the excess, if any, paid to Borrower. Such. Miscellaneous Proceeds shall be applied in the order provided for in Section 2. In the event of a total taking, destruction, or loss in value of lhe Property, the Miscellaneous Proceeds shall be applied lo the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Bon'ower. In the event of a partial taking, desh'uction, or loss in value of the Property in which the fair market value of the Property immediately before the partial Inking, destruction, or loss in value is e, qual to or greater lhan lhe amount of the sums secured by tliis Secnrity Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Secnrity Instrument shall be reduced by the amount of the Miscellaneons Proceeds mnltiplied by the ibllowing fi'action: (a) the tolal amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower. In the event of a partial taking, destruction, or loss in value of lhe Property in which the fair nmrket value of the Property immediately before the pm'rial taking, destruction, or loss in value is less lhan lhe amount of the sums secured immediately before the pm'rial taking, destruclion, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security {nstrument whether or not the sums are then due. · If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim lbr damages, Borrower fails to ·respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sams secured by this Security Instrument, whether or not then due. "Opposing Party" means the third pm'ty that owes Bon'ower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds~ Borrower shall be in default if any action or proceeding, whether civil Or criminal, is begun that, in Lender's judgment, conld result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under Ibis Security Instrnment. Borrower can cure such a default and, if accelet'ation has occnrred, reinslate as provided in Section 19, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes for£eiture of lhe Property or other malerial impah-ment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable lo the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender. · All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided roi' in Section 2. Initials: .~,!~- 0686097619 12. Borrower 'Not Released; Forbearance By Lc,der Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by lhis Security Instrument granted by Lender to Borrower or any Snccessor in Interest of Borrower shall not operate to release the liabihty of Borrower or any Successors in Interest of Borrower. Lender shall not be requh'ed to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Secm'ily Instrument by reason of any demand made by lhe original Borrower or any Successors in Interest of BOrrower. Any forbearance by Lender in exercising any right or remedy including, without lin'fitation, Lender's acceptance of payments fi'om third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then dne, shall not be a waiver of or preclude the exercise of any right or remedy. 13. Joint and Severnl Liability; Co-signers; Snccessors m~d Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Inslrument only to mortgage, grant and convey the co~signer's interest in tlie Property nnder the lerms of this ' Security Instrument; (b) is not personally obligated to pay tlie sums secured by this Security Instrument; and (C) agrees that Lender and any other BorJ'ower can agree to extend, modify, forbear or make any accommodations with regard to the tm'ms of this Security Instrument or the Note withont the co-signer's consent. Subject to the provisions of Section 18, any Successor in Interest of.Borrower who assumes Borrower's obligations tinder this Security Instrument in writing, and is approved by Lender, shall oblain all of Borrower's rights and benefits tinder this Security Inslrnment. Borrower shall not be released fi'om Borrower's obhgations and liability tinder this Security Instrt,ment unless Lender agrees to such release in writing. The covenants and agreements of this Security.Instrurnent shall bind (except-as provided in Section 20) and benefit the Successors and assigns of Lender. 14. Loan Charges. Lender may charge Borrower lees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and righls under this Security Insmm~ent, including, bnt not limited to, attorneys' fees, property inspection and valuation fees. In reg,'u'd to any other fees, the absence of express authority in ihis Secnrity Instrnn'tent to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Apphcable Law. . If the Loan is snbject to a law which sets maximnm loan charges, and that law is finally interpreled so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such 10an cliarge shall be reduced by the amount necessary to reduce Ihe charge to the permitted limit; and (b) any sums ah'eady collecled from Borrower which exceeded permitted linfits will be refnnded to Borrower. Lender may choose to make this refund by redncing the principal owed under the Note or by making a direct payment to Borrower. If a retired reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitnte a waiver of any right of action Borrower might have arising out of such overcharge. 15. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Bon'ower in connection with this Security Instrument shall be deemed to have been given to Bon'ower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means.' Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otlierwise. The notice address shall be the Property Address unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address tinder this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice requh'ed by this Security Instrument is also required tinder Applicable Law, the .Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. Initials: ~.' ~f~ (~-6A(WY) (000S) Pag~ lO ot'lS ,~ (~ Form 3051 1/0~ 0686097619 16. Governing Law; Severability; Rnles of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security. Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law nfight explicitly or implicitly allow lhe parties to agree by contract or it nfight be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Insu'ument or the Note conflicts with Applicable Law, such conflict shall not affect other provisi6ns of this Security Instrument or the Note which can be given effect wi,hoax the conflicting provision. As used in this Security Instrument: (a) words of the masculine gender shall mean and include · co~xesponding nearer words or words of the feminine gender; (b) words in the singular shall mean and tacit,de the plural and vice versa; and (c) the word "may" gives sole discretion withot, t any obligation m take any action. 17. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Insm,ment. 18. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, instalhnent sales contract or escrow agreement, the intent of which is lhe transfer of title by Borrower at a futnre date to a purchaser. Il' all or any part. of the Property or any Interest iii the Property is sold or transferred (or if Bon'ower is not a natural person and a beneficial interest in Bon'ower is sold or transferred) wi,hoax Lender's prior written consent, Lender may require immediate payment iix fall of all sams secured by this Security Instrnn~ent. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days fi-mn the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Secnrity Instrnment. If Borrower fails to pay these sums prior to the expiratio'n of this period, Lender may invoke any remedies permitted by lhis Security Instrument wi,hoaX further notice or demand on Bon'ower. 19. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Bon'ower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days belbre sale of the Property Pursuant to any power of sale contained in this Security Instrument; (b) snch other period as Applicable Law might specify for the termination of Bon'ower's right to reinstate; or (c) entry of a judgment enforcing lhis Secnrity Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due nnder this Security Instrument and the Note as if no acceleration had occun'ed; (b) cures any deIhult of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, inclnding, but not limiled to, reasonable attorneys' fees, property inspection and valuation Fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrnment; and'(d) takes such action as Lender may reasonably reqnh'e to assure that Lender's inlerest in the Property and rights under this Security lnstrnment, and Borrower's obligation to pay the snms secured by this Security Instrument, shall ·continue unchanged. Lender may require that Bon'ower pay snch reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, lreasurer's check or cashier's check, provided any such check is drawn npon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstaletnent by Borrower, this Secnrity Instrument and obligations secured hereby shall remain rally effective as if no acceleration had occun'ed. However, this right to reinstate shall not apply in the case of acceleration under Section 18. 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in,he entity (known as the "Loan Servicer") that collects Periodic Payments dne under the Note and this Secnrity Instrument and perforxns other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of lhe Loan Servicer urn'elated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change Which will state the name and address of the new Loan Servicer, the address to which payments should be made and any other in[brmation RESPA requires in connection with a (~-6A(WY) (ooo5) PaDa~ offs Form 3051 1/01 0686097619 notice of lransfer of servicing. If the Note is sold and thereafter the Loan is serviced by a Loan Servicer other lhan lhe pnrchaser of the Note, lhe mortgage loan servicing obligations to Borrower will remain with the Loan Servicer or be ~'ansferred t0 a snccessor Loan Servicer and are not assnmed by Ihe Nole pm'chaser unless otherwise provided by the Note pnrchaser. Neither Bon'ower nor Lender may commence, join, or be joined to any judicial action (as either an individual htigant °r the member of a class) that arises fi'om the other party's actions pursnant lo this Security Insirnment or that alleges that the olher party has breached any provision o[ or any duty owed by reason o[ this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Seclion 15) of such alleged breach and aftBrded the other party hereto a reasonable period after the giving of such notice 1o take corrective action. If Applicable Law progides a time period which mnst elapse before certain action caj~ be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity 1o cnre given to Bon'ower pursuant to Section 22 and the notice 'of acceleration given to Borrower pm'snant to Section 18 shall be deemed to satisfy the notice and opportunity to take con'ective action provisions of this Section 20. 21. Hazardous Substances. As used in this Section 21: (a) "Hazm'dous Subslances' are those snbslances defined as toxic or hazardons snbstances, pollntants, or wastes by Environmental Law and the following snbstances: gasoline, kerosene, other flammable or toxic petroleom products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos Or formaldehyde, and radioactive materials; (b). "Envkonmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate lo health, safety or environmenlal·protection; (c) "Environmental Cleanup" includes any response action, remedial action, m' removal action, as defined in Environmental Law; and '(d)'an "Environmental Condition" means a condition that can cause, contribnte to, or otherWise trigger an Environmental Cleannp. Borrower shall not cause or permit the presence, nse, disposal, slorage, or release of any Hazardous Snbstances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation off any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the wflue of the Property. The preceding two senlences shall not apply to the Presence, nse, or storage on tl~e Property of small quantities of Hazardous Snbstgnces that are generally recognized to be appropriate to normal residential uses and to maintenance of the Properly (including, but not limited to, hazardons subslances in consumer products). Bon'ower shall promptly give Lender written notice of (a) any investigation, claim, demand, lawsnit or other action by any governmenlal or regulatory agency or private party involving the ProPerty and any Hazardous Substance or Enviromnental Law of which Borrower has aclual 'knowledge, (b) any Envkonmental Condition, inclnding but not limited to, any spilling, leaMng, discharge, release or threat of release of any Hazardons Snbstance, and (c) any condition caused by the presence, nse or release of a Hazard0ns Substance which adversely affects' the value of lhe Property. If Bon'ower learns, or is notified by any governmental or regulatmT attthority, or any private party, that any removal or other remediation of any Hazardons Substance alTecting the Property is necessary, Bolxower shall promptly take all necessaiy remedial actions in accordance with Environmental Law. Nothing herein shall creale any obligation on Lender ~or an Envkonmental Cleanup. Initials: ¢. '~ (~-6A(WY) (0005) Page~2of~5 Form 3051 1/01 0686097619 0 960 4 NON-UNIFORM COVENANTS. Borrower and Lender further covenan! and agree as follows: 22. Acceleration; Remedies. Lender Shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or '.~gl'eement in this Security htsh'ument (but not prior to acceleration nnder Section 18 unless Applic:lble Law provides otherwise). The notice shall specify: (at the default; (bt the action required to cure the default; (ct a date, not less than 30 days fi'om the date tlie notice is given to Borrower, by which the default must be cured; and (ti) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured bY this Security Instrument attd s.'de of the Property. The notice slndl furtber inform Borrower of the right to reinstate after acceleration and the right to bring a conrt action to assert the non-existence of a default or any other defeuse of Borrower to acceler:ltion and sale. If the default is not cured on or be£ore the date specified ill the notice, Lender tit its option may require immediate payment in full of · 'ill sums secured by this Security Instrument without further demand and m.'ly invoke the power of sale and any other remedies permitted by Applicable L.'iw. Lender shall be entitled to collect .'ill expenses hicurred in lmrsuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and cysts of title evidence. If Lender invokes the power of sale, Lender slmll give notice of intent to foreclose to Borrower and to the person iii possession of the Property, if different, in accordance with Applicable Law. Lender shall give notice of the sale to Borrower in the manner provided in Section 15. Lender shall publish the notice of sale, and the Property shall be sohl in the manner prescribed by Applicable Law. Lender or its designee may purchase the Property itt any stile. The proceeds of the sale sh.'dl be applied in the following order: (at to all expenses of the s:de, including, but not limited to, reason'.lble attorneys' fees; (bt to all sums secured by this Security hlsh'ument; and (ct any excess to the persou or persons legally entitled to it. 23. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Securily Instrument. Borrower shall pay any recordalion costs. Lender may charge BolTower a fee for releasing this Security Instrument, but only if the fee is paid to a thkd party for services rendered and the charging of the fee is pernfitled under Applicable Law. 24. W:livers. Borrower releases and xvaives all rights under and by virtue of lhe homestead exemption laws of Wyoming. Initials: ¢, '~ (~-6A(WY) (0005) Page 13o¢15 Form 3051 1/01 0686097619 ~ ~83 BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with il. ' Witnesses: ~'3//~a_,'3~'6 ~ (Sen,) -Borrower KEVIN MERRITT -Borrower BILLIE JO MEP, RITT (Seal) -Borrower (Seal) -Borrower (Seal) -Borrower (Seal) IBolTower (Seal) -Borrower (SeaL) -Borrower (~6A(WY). (ooos) Page 14 of 15 Form 3051 1/01 0686097619 OS--q O04 STATE OF WYOMING, The £oregoing instrument was acknowledged before me this by Kevin Merritt and B±llie Jo Merritt Lincoln County ss: 12th d.ay of December, 2003 My Commission Expires: February 2, 2006 &NSJA'Y SANOAtL · NOTN:IY PgSt.lC Notary Public (~-6A(WY) (ooo5) Page 15 of 15 Initials: .~/' J~ Form 3051 1/01 0686097619 osS¢oa4 ADJUSTABLE RATE RIDER (LIBOR 6 Month Index (As Published In The tVall Street Journal) - Rate Caps) THIS ADJUSTABLE RATE RIDER is made this twelfth day of December, 2003 and is incorpOrated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned ("Borrower") to secure Borrower's Adjustable Rate Note (the "Note") to FIELDSTONE MORTGAGE COMPANY ("Lender") of the same date and covering the property described in the Security Instrument and located at: 375 HEAP DRIVE, THAYNE, Wyoming 83127 [Property Address] THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE AMOUNT BORROWER'S INTEREST RATE CAN CHANGE AT ANY ONE TIME AND THE MAXIMUM RATE BORROWER MUST PAY. ADDITIONAL COVENANTS. In addition to the covenants and agreemenls made in the Security Instrument, Borrower and Lender filrther covenant and agree as follows: A. INTEREST RATE AND MONTHLY PAYMENT CHANGES The Note provides for an initial interest yate of 7. 000 %. The Note provides for changes in the interest rate and the monthly payments, as follows: 4. INTEREST RATE AND MONTHLY PAYMENT CHANGES (A) Change Dates The interest rate I will pay may change on the first day of ,January 2006 and'on that day every SIXTH month thereafter. Each date on which my interest rate conld change is called a "Change Date." MULTISTATE ADJUSTABLE RATE RIDER-LIBOR 6 MONTH INDEX (AS PUBLISHED IN THE WALL STREET JOURNAL ) -Single Family- Fannie Mae Uniform Instrument (~D~838R (0005) Form 3138 1/01 Page1 oi4 Initials: ~,~[~_.~"~ ' VMP MORTGAGE FORMS-(800)521-729' ' (B) Tile Index Beginning with the Fa'st Change Date, my interest rate will be based on an Index. The "Index" is the average of interbank offered' rates fbi' 6 month U.S. dollar-denmninated deposits in the London market ("LIBOR"), as pnblished in The Wall Street Journal. The most recent Index figure available as of the first business day of the month immediately preceding the month in which the Change Date occnrs is called the "Cnrrent Index." If the Index is no longer available, the Note Holder will choose a new index that is based upon. comparable information. The Note Holder will give me notice of this choice. (C) Calculation of Changes Before each Change Date, the Note Holder will calculate my new interest rate by adding FIVE AND ONE-HALF percentage points ( 5. 500 %) to the Current Index. The Note Holder will then round the result of this addition to the nearest one-eighth of one percentage point (0.125°~). Subject lo the limits stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Change Date. The Note Holder will then determine the amount of the monthly payment that would be snfficient to repay the unpaid principal that I am expected to owe at the Change Date in fidl on the Matra'try Date at my new interest rate in substantially eqnal payments. The result of lhis calcnlation Will be the new amount of my monthly payment. (D) Limits on Interest Rate Changes The interest rate I am 'required to pay at the fin'st Change Date will not be greater than 10. 000 % or less than 7. 000 %. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than ONE percentage points ( 1. 000 %) fi'om the rate of interest I have been paying for the preceding 6 months. My interest rate will never be greater than 13. 000 %. (E) Effective Date of ChangesMy interest rate will never be less than 7. 000%. My new inlerest rate will become effective on each Change Date. I will pay the mnonnt of my new monthly payment beginning on the Fa'st monthly payment date after the Change Date until lhe amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or nmil to me a notice of any changes in my interest rate and the amount of my monthly payment before the effective date of any change. The notice will include information requh'ed by law to be given to me and also the title and lelephone number of a person who will answer any question I may have regarding the notice. Initials: (~838R (0005) Page 2 of 4 ' ' Form 3138 1/01 287 B. TRANSFER OF THE PROPERTy OR A BENEFICIAL INTEREST IN BORAIOX, VER Uniform Covenant 18 of'the Security Instrument is amended to read as follows: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, "Interest in the Property" means any legal or beneficial interest in the Property, including, bnt not limited to, those beneficial interests trans£erred in a bond for deed, contract for deed, inslalhnent sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a fulnre date to a purchaser. If all or any part of the Property or any Interest in the Property is sold or transfen-ed (or if Borrower is not a nalural person and a beneficial inlerest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in fidl of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Apphcable Law. Lender also. shall not exercise this option if: (a) Borrower causes to be subnfitted to Lender information required by Lender to evaluate the intended transferee as if a new loan were being made to the transferee; and (b) Lender reasonably detern'fines that Lender's security will not be impaired by the loan assnmption and that the risk ora breach of any covenant or agreement in this Security Instrument is acceptable to Lender. To the extent permitted by Apphcable Law, Lender may charge a reasonable fee as a condition to Lender's consent to the loan assnmption. Lender also may require the lransferee to sign an assnmption agreement that is acceptable to Lender and that obligates the transferee lo keep all the pronfises and agreements made in the Note and in this Secnrity Instrument. Bon'ower will continue to be obligated under the Note and this Security Instrument unless Lender releases Borrower in writing. If Lender exercises the option to reqnh'e immediate payment in fidl, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days fi'om the date the notice is given in accordance with SectiOn 15 within which Borrower mnst pay all sums secured by this Security Instrument. If' Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument withont farther notice or demand on Borrower. 1~838R (0005) Page 3 of 4 ~ Form 3138 1/01 288 BY SIGNING BELOW, Borrower accepts and agrees to lhe terms and covenants contained in this Adjt, slable Rale Rider. (Seal) -Borrower -BmTower (Seal) (Seal) -Borrower -Borrower (Seal) (Seal) -Borrower -Borrower ~da388 (ooo5) Page 4 of 4 Form 3138 1101