**APPENDIX II: [MODEL MORTGAGE FORM]{.underline}**

\[See Instructions Attached\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Space Above This Line for
Recording Data\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

MORTGAGE

THE MORTGAGE (\"Security Instrument\") is given on
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,20\_\_\_. The Borrower is
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
whose address is
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(\"Borrower\").

This Security Instrument is given to
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
which is organized and existing under the laws of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, and whose address is
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(\"Lender\"). Borrower owes Lender the principal sum of
\_\_\_\_\_\_\_\_\_\_ Dollars (U.S. \$\_\_\_\_\_\_\_\_\_ ). This debt is
evidenced by Borrower\'s note dated the same date as this Security
Instrument (\"Note\"), which provides for monthly payments, with the
full debt, if not paid earlier, due and payable on
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

This Security Instrument secures to Lender: (a) the repayment of the
debt evidenced by the Note, with interest, and all renewals, extensions
and modifications of the Note; (b) the payment of all other sums, with
interest, advanced under Paragraph 7 to protect the security of this
Security Instrument; and (c) the performance of Borrower\'s covenants
and agreements under this Security Instrument and the Note. For this
purpose, Borrower does hereby mortgage, warrant, grant and convey to the
Lender, with power of sale the following described property located in
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_County,
Michigan:

which has the address of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\[Street\]
\_\_\_\_\_\_\_\_\_\_\_ \[City\],
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\[State\]
\_\_\_\_\_\_\_ \[Zip Code\], (\"Property Address\");

TOGETHER WITH all the improvements now or hereafter erected on the
property, and all easements, appurtenances, and fixtures now or
hereafter a part of the property. All replacements and additions shall
also be covered by this Security Instrument. All of the foregoing is
referred to in this Security Instrument as the \"Property.\"

BORROWER COVENANTS that borrower is lawfully seized of the estate hereby
conveyed and has the right to mortgage, grant and convey the Property
and that the Property is unencumbered, except for encumbrances of
record. Borrower warrants and will defend generally the title to the
Property against all claims and demands, subject to any encumbrances or
record.

THIS SECURITY INSTRUMENT combines uniform covenants for national use and
non-uniform covenants with limited variations by jurisdiction to
constitute a uniform security instrument covering real property.

Borrower and Lender covenant agree as follows:

UNIFORM COVENANTS.

1.  **Payment of Principal, Interest and Late Charge.** Borrower shall
    pay when due the principal of, and interest on, the debt evidenced
    by the Note and late charges due under the Note.

2.  **Monthly Payment of Taxes, Insurance, and Other Charges.** Borrower
    shall include in each monthly payment, together with the principal
    and interest as set forth in the Note and any late charges, a sum
    for (a) taxes and special assessments levied or to be levied against
    the Property, (b) leasehold payments or ground rents on the
    Property, and (c) premiums for insurance required under Paragraph 4.
    In any year in which the Lender must pay a mortgage insurance
    premium to the Secretary of Housing and Urban Development
    (\"Secretary\"), or in any year in which such premium would have
    been required if Lender still held the Security Instrument, each
    monthly payment shall also include either: (i) a sum for the annual
    mortgage insurance premium to be paid by Lender to the Secretary,
    or (ii) a monthly charge instead of a mortgage insurance premium if
    this Security Instrument is held by the Secretary, in a reasonable
    amount to be determined by the Secretary. Except for the monthly
    charge by the Secretary, these items are called \"Escrow Items\" and
    the sums paid to Lender are called \"Escrow Funds.\"

> Lender may, at any time, collect and hold amounts for Escrow Items in
> an aggregate amount not to exceed the maximum amount that may be
> required for Borrower\'s escrow account under the Real Estate
> Settlement Procedures Act of 1974, 12 U.S.C. Sec. 2601 et seq. and
> implementing regulations, 24 CFR Part 3500, as they may be amended
> from time to time (RESPA), except that the cushion or reserve
> permitted by RESPA for unanticipated disbursements or disbursements
> before the Borrower's payments are available in the account may not be
> based on amounts due for the mortgage insurance premium.
>
> If the amounts held by Lender for Escrow Items exceed the amounts
> permitted to be held by RESPA, Lender shall deal with the excess funds
> as required by RESPA. If the amounts of funds held by Lender at any
> time are not sufficient to pay the Escrow Items when due, Lender may
> notify the Borrower and require Borrower to make up the shortage as
> permitted by RESPA.
>
> The Escrow Funds are pledged as additional security for all sums
> secured by this Security Instrument. If Borrower tenders to Lender the
> full payment of all such sums, Borrowers account shall be credited
> with the balance remaining for all installment items (a), (b), and (c)
> and any mortgage insurance premium installment that Lender has not
> become obligated to pay to the Secretary, and Lender shall promptly
> refund any excess funds to Borrower. Immediately prior to a
> foreclosure sale of the Property or its acquisition by Lender,
> Borrower\'s account shall be credited with any balance remaining for
> all installments for items (a), (b), and (c).

3.  **Application of Payments.** All payments under Paragraphs 1 and 2
    shall be applied by Lender as follows:

> First, to the mortgage insurance premium to be paid by Lender to the
> Secretary or to the monthly charge by the Secretary instead of the
> monthly mortgage insurance premium;
>
> Second, to any taxes, special assessments, leasehold payments or
> ground rents, and fire, flood and other hazard insurance premiums, as
> required;
>
> Third, to interest due under the Note;
>
> Fourth, to amortization of the principal of the Note; and
>
> Fifth, to late charges due under the Note.

4.  **Fire, Flood and Other Hazard Insurance.** Borrower shall insure
    all improvements on the Property, whether now in existence or
    subsequently erected, against any hazards, casualties, and
    contingencies, including fire, for which Lender requires insurance.
    This insurance shall be maintained in the amounts and for the
    periods that Lender requires. Borrower shall also insure all
    improvements on the Property, whether now in existence or
    subsequently erected, against loss by floods to the extent required
    by the Secretary. All insurance shall be carried with companies
    approved by Lender. The insurance policies and any renewals shall be
    held by Lender and shall include loss payable clauses in favor of,
    and in a form acceptable to, Lender.

> In the event of loss, Borrower shall give Lender immediate notice by
> mail. Lender may make proof of loss if not made promptly by Borrower.
> Each insurance company concerned is hereby authorized and directed to
> make payment for such loss directly to Lender, instead of to Borrower
> and to Lender jointly. All or any part of the insurance proceeds may
> be applied by Lender, at its option, either (a) to the reduction of
> the indebtedness under the Note and this Security Instrument, first to
> any delinquent amounts applied in the order in Paragraph 3, and then
> to prepayment of principal, or (b) to the restoration or repair of the
> damaged Property. Any application of the proceeds to the principal
> shall not extend or postpone the due date of the monthly payments
> which are referred to in Paragraph 2, or change the amount of such
> payments. Any excess insurance proceeds over an amount required to pay
> all outstanding indebtedness under the Note and this Security
> Instrument shall be paid to the entity legally entitled thereto.
>
> In the event of foreclosure of this Security Instrument or other
> transfer of title to the Property that distinguishes the indebtedness,
> all right, title and interest of Borrower in and to insurance policies
> in force shall pass to the purchaser.

5.  **Occupancy, Preservation, Maintenance and Protection of the
    Property; Borrower\'s Loan Application; Leaseholds.** Borrower shall
    occupy, establish, and use the Property as Borrower\'s principal
    residence within sixty days after the execution of this Security
    Instrument (or within sixty days of a later sale or transfer of the
    Property) and shall continue to occupy the Property as Borrowed
    principal residence for at least one year after the date of
    occupancy, unless Lender determines that requirement will cause
    undue hardship for Borrower, or unless extenuating circumstances
    exist which are beyond Borrower\'s control. Borrower shall notify
    Lender of any extenuating circumstances. Borrower shall not commit
    waste or destroy, damage or substantially change the Property or
    allow the Property to deteriorate, reasonable wear and tear
    excepted. Lender may inspect the Property if the Property is vacant
    or abandoned or the loan is in default. Lender may take reasonable
    action to protect and preserve such vacant or abandoned property.
    Borrower shall also be in default if borrower, during the loan
    application process, gave materially false or inaccurate information
    or statements to Lender (or failed to provide Lender with any
    material information) in connection with the loan evidenced by the
    Note, including, but not limited to, representations concerning
    Borrower\'s occupancy of the Property as a principal residence. If
    this Security Instrument is on a leasehold, Borrower shall comply
    with the provisions of the lease. If Borrower acquires fee title to
    the Property, the leasehold and fee title shall not be merged unless
    Lender agrees to the merger in writing.

6.  **Condemnation.** The proceeds of any award or claim for damages,
    direct or consequential, in connection with any condemnation or
    other taking of any part of the Property, or for conveyance in place
    of condemnation, are hereby assigned and shall be paid to Lender to
    the extent of the full amount of the indebtedness that remains
    unpaid under the Note and this Security Instrument. Lender shall
    apply such proceeds to the reduction of the Indebtedness under the
    Note and this Security Instrument, first to any delinquent amounts
    applied in the order provided in Paragraph 3, and then to prepayment
    of principal. Any application of the proceeds to the principal shall
    not extend or postpone the due date of the monthly payments, which
    are referred to in Paragraph 2, or change the amount of such
    payments. Any excess proceeds over an amount required to pay all
    outstanding indebtedness under the Note and this Security Instrument
    shall be paid to the entity legally entitled thereto.

7.  **Charges to Borrower and Protection of Lender\'s Rights in the
    Property.** Borrower shall pay all governmental or municipal
    charges, fines and impositions that are not included in Paragraph 2.
    Borrower shall pay these obligations on time directly to the entity
    which is owed the payment. If failure to pay would adversely affect
    Lender\'s interest in the Property, upon Lender\'s request Borrower
    shall promptly furnish to Lender receipts evidencing these payments.

> If Borrower fails to make these payments or the payments required by
> Paragraph 2, or fails to perform any other covenants and agreements
> contained in this Security Instrument, or there is a legal proceeding
> that may significantly affect Lender\'s rights in the Property (such
> as a proceeding in bankruptcy, for condemnation or to enforce laws or
> regulations), then Lender may do and pay whatever is necessary to
> protect the value of the Property and Lender\'s rights in the
> Property, including payment of taxes, hazard insurance and other items
> mentioned in Paragraph 2.
>
> Any amounts disbursed by Lender under this Paragraph shall become an
> additional debt of Borrower and be secured by this Security
> Instrument. These amounts shall bear Interest from the date of
> disbursement at the Note rate, and at the option of Lender shall be
> immediately due and payable.
>
> 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; (b) contests in good faith the lien by, or defends against
> enforcement of the lien in, legal proceedings which in the Lenders
> opinion operate to prevent the enforcement of the lien; 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 above within 10 days
> of the giving of notice.

8.  **Fees.** Lender may collect fees and charges authorized by the
    Secretary.

9.  **Grounds for Acceleration of Debt.**

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(a) **Default.** Lender may, except as limited by regulations issued by
    the Secretary in the case of payment defaults, require immediate
    payment in full of all sums secured by this Security Instrument if:

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(i) Borrower defaults by failing to pay in full any monthly payment
    required by this Security Instrument prior to or on the due date of
    the next monthly payment, or

(ii) Borrower defaults by failing, for a period of thirty days, to
     perform any other obligations contained in this Security
     Instrument.

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(b) **Sale Without Credit Approval.** Lender shall, if permitted by
    applicable law (including Section 341(d) of the Garn-St Germain
    Depository Institutions Act of 1982, 12 U.S.C 1701j-3(d)) and with
    the prior approval of the Secretary, require immediate payment in
    full of all sums secured by this Security Instrument if:

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1.  All or part of the Property, or a beneficial interest in a trust
    owning all or part of the Property, is sold or otherwise transferred
    (other than by devise or descent), and

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(ii) The Property is not occupied by the purchaser or grantee as his or
     her principal residence, or the purchaser or grantee does so occupy
     the Property, but his or her credit has not been approved in
     accordance with the requirements of the Secretary.

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(c) **No Waiver.** If circumstances occur that would permit Lender to
    require immediate payment in full, but Lender does not require such
    payments, Lender does not waive its rights with respect to
    subsequent events.

(d) **Regulations of HUD Secretary.** In many circumstances regulations
    issued by the Secretary will limit Lender rights, in the case of
    payment defaults, to require immediate payment in full and foreclose
    if not paid. This Security Instrument does not authorize
    acceleration or foreclosure if not permitted by regulations of the
    Secretary.

(e) **\[OPTIONAL\] Mortgage Not Insured.** Borrower agrees that if this
    Security Instrument and the Note are not determined to be eligible
    for insurance under the National Housing Act within \_\_\_\_ ^1^from
    the date hereof, Lender may, at its option require immediate payment
    in full of all sums secured by this Security Instrument. A written
    statement of any authorized agent of the Secretary dated subsequent
    to from the date hereof, declining to insure this Security
    Instrument and the Note, shall be deemed conclusive proof of such
    ineligibility. Notwithstanding the foregoing, this option may not be
    exercised by Lender when the unavailability of insurance is solely
    due to Lender\'s failure to remit a mortgage insurance premium to
    the Secretary.

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10. **Reinstatement.** Borrower has a right to be reinstated if Lender
    has required immediate payment in full because of Borrower\'s
    failure to pay an amount due under the Note or this Security
    Instrument. This right applies even after foreclosure proceedings
    are instituted. To reinstate the Security Instrument, Borrower shall
    tender in a lump sum all amounts required to bring Borrowed account
    current including, to the extent they are obligations of Borrower
    under this Security Instrument, foreclosure costs and reasonable and
    customary attorney\'s fees and expenses properly associated with the
    foreclosure proceeding. Upon reinstatement by Borrower, this
    Security Instrument and the obligations that it secures shall remain
    in effect as if Lender had not required immediate payment in full.
    However, Lender is not required to permit reinstatement if: (i)
    Lender has accepted reinstatement after the commencement of
    foreclosure proceedings within two years immediately preceding the
    commencement of a current foreclosure proceeding, (ii) reinstatement
    will preclude foreclosure on different grounds in the future,
    or (iii) restatement will adversely affect the priority of the lien
    created by this Security Instrument.

11. **Borrower Not Released; Forbearance by Lender Not a Waiver.**
    Extension of the time of payment or modification of amortization of
    the sums secured by this Security Instrument granted by Lender to
    any successor in interest of Borrower shall not operate to release
    the liability of the original Borrower or Borrower\'s successor in
    interest. Lender shall not be required to commence proceedings
    against any successor in interest or refuse to extend time for
    payment or otherwise modify amortization of the sums secured by this
    Security Instrument by reason of any demand made by the original
    Borrower or Borrower\'s successors in interest. Any forbearance by
    Lender in exercising any right or remedy shall not be a waiver of or
    preclude the exercise of any right or remedy.

12. **Successors and Assigns Bound; Joint and Several Liability;
    Co-signers.** The covenants and agreements of this Security
    Instrument shall bind and benefit the successors and assigns of
    Lender and Borrower, subject to the provisions of Paragraph 9(b).
    Borrowers covenants and agreements shall be joint and several. Any
    Borrower who co-signs this Security Instrument but does not execute
    the Note: (a) is co-signing this Security Instrument only to
    mortgage, grant and convey that Borrower\'s interest in the Property
    under the terms of this Security Instrument; (b) is not personally
    obligated to pay the

> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> *^1^ Lenders are authorized, but not required, to add Paragraph 9(e).
> Any period may be inserted in the two blanks, expressed either in
> number of days or months, which is not shorter than sixty days and not
> longer than eight months.*
>
> sums secured by this Security Instrument; and (c) agrees that Lender
> and any other Borrower may agree to extend, modify, forbear or make
> any accommodations with regard to the term of this Security Instrument
> or the Note without that Borrower\'s consent.

13. **Notices.** Any notice to Borrower provided for in this Security
    Instrument shall be given by delivering it or by mailing it by first
    class mail unless applicable law requires use of another method. The
    notice shall be directed to the Property Address or any other
    address Borrower designates by notice to Lender. Any notice to
    Lender shall be given by first class mail to Lender\'s address
    stated herein or any address Lender designates by notice to
    Borrower. Any notice provided for in this Security Instrument shall
    be deemed to have been given to Borrower or Lender when given as
    provided in this paragraph.

14. **Governing Law; Severability.** This Security Instrument shall be
    governed by Federal law and the law of the jurisdiction in which the
    Property is located. In the event that any provision or clause of
    this Security Instrument or the Note conflicts with applicable law,
    such conflict shall not affect other provisions of this Security
    Instrument or the Note which can be given effect without the
    conflicting provision. To this end, the provisions of this Security
    Instrument and the Note are declared to be severable.

15. **Borrower\'s Copy.** Borrower shall be given one conformed copy of
    the Note and of this Security Instrument.

16. **Hazardous Substances.** Borrower shall not cause or permit the
    presence, use, disposal, storage, or release of any Hazardous
    Substances on or in the Property. Borrower shall not do, nor allow
    anyone else to do, anything affecting the Property that is in
    violation of any Environmental law. The preceding two sentences
    shall not apply to the presence, use, or storage on the Property of
    small quantities of Hazardous Substances that are generally
    recognized to be appropriate to normal residential uses and to
    maintenance of the Property.

> Borrower shall promptly give Lender written notice of any
> Investigation, claim, demand, lawsuit or other action by any
> governmental or regulatory agency or private party involving the
> Property and any Hazardous Substance or Environmental Law of which
> Borrower has actual knowledge. If Borrower learns, or is notified by
> any governmental or regulatory authority, that any removal or other
> remediation of any Hazardous Substances affecting the Property is
> necessary, Borrower shall promptly take all necessary remedial actions
> in accordance with Environmental Law.
>
> As used in this paragraph 16, \"Hazardous Substances\" are those
> substances defined as toxic or hazardous substances by Environmental
> law and the following substances: gasoline, kerosene, other flammable
> or toxic petroleum products, toxic pesticides and herbicides, volatile
> solvents, materials containing asbestos or formaldehyde, and
> radioactive materials. As used in the paragraph 16, \"Environmental
> law\" means federal laws and laws of the jurisdiction where the
> Property is located that relate to health, safety or environmental
> protection.

NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as
follows:

17. **Assignment of Rents.** \[*Use this language unless prohibited by
    state law2/\]*. Borrower unconditionally assigns and transfers to
    Lender all the rents and revenues of the Property. Borrower
    authorizes Lender or Lender agents to collect the rents and revenues
    and hereby directs each tenant of the Property to pay the rents to
    Lender or Lender agents. However, prior to Lender notice to Borrower
    of Borrower\'s breach of any covenant or agreement in the Security
    Instrument, Borrower shall collect and receive all rents and
    revenues of the Property as trustee for the benefit of Lender and
    Borrower. This assignment of rents constitutes an absolute
    assignment and not an assignment for additional security only.

> If Lender gives notice of breach to Borrower: (a) all rents received
> by Borrower shall be held by Borrower as trustee for benefit of Lender
> only, to be applied to the sums secured by the Security Instrument;
> (b) Lender shall be entitled to collect and receive all of the rents
> of the Property: and (c) each tenant of the Property shall pay all
> rents due and unpaid to Lender or Lender agent on Lender\'s written
> demand to the tenant.
>
> Borrower has not executed any prior assignment of the rents and has
> not and will not perform any act that would prevent Lender from
> exercising its rights under this Paragraph 17.
>
> Lender shall not be required to enter upon, take control of or
> maintain the Property before or after giving notice of breach to
> Borrower. However, Lender or a judicially appointed receiver may do so
> at any time there is a breach. Any application of rents shall not cure
> or waive any default or invalidate any other right or remedy of
> Lender. This assignment of rents of the Property shall terminate when
> the debt secured by the Security Instrument is paid in full.

18. **Foreclosure Procedure.** \[*For illustration only. Needs state
    adaptation as provided in attached instructions.\]* If Lender
    requires immediate payment in full under Paragraph 9, Lender may
    invoke the power of

> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> *2/If changes are necessary to create an assignment of rents
> enforceable under state law, the lender should make necessary changes
> but the revised paragraph should grant the lender the maximum interest
> in rents permitted by law.*
>
> sale and any other remedies permitted by applicable law. Lender shall
> be entitled to collect all expenses incurred in pursuing the remedies
> provided in this Paragraph 18, including, but not limited to,
> reasonable attorney\'s fees and costs of title evidence.
>
> If Lender invokes the power of sale, Lender shall give notice of sale
> to Borrower in the manner provided in Paragraph 13. Lender shall
> publish and post the notice of sale, and the Property shall be sold in
> the manner prescribed by applicable law. Lender or its designee may
> purchase the Property at any sale. The proceeds of the sale shall be
> applied in the following order: (a) to all expenses of the sale,
> including, but not limited to, reasonable attorney\'s fees; (b) to all
> sums secured by this Security Instrument; and (c) any excess to the
> person or persons legally entitled to it.
>
> \[The following language is mandatory in all cases.\] If the Lender\'s
> interest in this Security Instrument is held by the Secretary and the
> Secretary requires immediate payment in full under Paragraph 9, the
> Secretary may invoke the nonjudicial power of sale provided in the
> Single Family Mortgage Foreclosure Act of 1994 (\"Act\") (12 U.S.C
> 3751 et seq.) by requesting a foreclosure commissioner designated
> under the Act to commence foreclosure and to sell the Property as
> provided in the Act. Nothing in the preceding sentence shall deprive
> the Secretary of any rights otherwise available to a Lender under this
> Paragraph 18 or applicable law.
>
> *\[Add any state-specific paragraphs in accordance with attached
> instructions and the current edition of HUD Handbook 4165.1.\]*
>
> *\[Number as final paragraph or leave unnumbered but place after
> numbered paragraphs.\]* Riders to this Security Instrument. If one or
> more riders are executed by Borrower and recorded together with this
> Security Instrument, the covenants of each such rider shall be
> incorporated into and shall amend and supplement the covenants and
> agreements of this Security Instrument as if the rider(s) were a part
> of this Security Instrument. \[Check applicable box(es)\].
>
> \_\_ Condominium Rider \_\_ Growing Equity Rider \_\_ Other
> \[specify\]
>
> \_\_ Planned Unit Development Rider \_\_ Graduated Payment Rider
>
> BY SIGNING BELOW, Borrower accepts and agrees to the terms contained
> in this Security Instrument and in any rider(s) executed by Borrower
> and recorded with it.

Witnesses:

> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(SEAL)
>
> Borrower
>
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(SEAL)
>
> Borrower
>
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\[Space Below This Line for
> Acknowledgement\]\_\_\_\_\_\_\_\_\_\_\_\_\_

Instructions for Model Mortgage Form

HUD requires that a security instrument follow the form and content of
the approved FNMA/FHLMC security instrument for the jurisdiction, except
where HUD has determined that differences are needed to reflect HUD
policy and practice. The following explains those differences.
Additional instructions are found in the current edition of HUD Handbook
4165.1.

[Language Preceding Uniform Covenants]{.underline}

Use FNMA/FHLMC language but add a box for the FHA Case No. as shown on
the Model Mortgage Form. The Model Mortgage Form uses the FNMA/FHLMC
language for Michigan as an example. The form may include variations to
the standard language that have been approved by FNMA and/or FHLMC. For
Maine and New York in which FNMA and FHLMC have approved \"plain
English\" forms, the format and language should be based on FNMA/FHLMC
forms for other states provided that the language is in conformity with
applicable law.

[Uniform Covenants]{.underline}

The form should designate the paragraphs preceding Paragraph 17 on
assignment of rents as \"Uniform Covenants\". The text of these
paragraphs must be used as presented in the Model Mortgage Form without
any change. FNMA/FHLMC language may not be substituted. If change is
needed to meet requirements of state or local law or practice, written
approval from HUD is needed before the change is made.

[Non-Uniform Covenants]{.underline}

The form should designate the paragraphs beginning with Paragraph 17 on
assignment of rents as \"Non-Uniform Covenants\".

a.  The FNMA/FHLMC paragraph on foreclosure procedures in the
    jurisdiction will need adaptation to reflect HUD policy. The Model
    Mortgage Form contains an adaptation of the FNMA/FHLMC language for
    Michigan as an example. Following the phrase \"If Lender requires
    immediate payment in full under Paragraph 9\" as shown Paragraph 18
    in the Model Mortgage Form, the mortgage should use the foreclosure
    procedures paragraph of the current approved FNMA/FHLMC form
    (including language regarding payment of costs such as attorney\'s
    fees) as a guide with any necessary adaptation to conform to these
    instructions. Language in the FNMA/FHLMC paragraph regarding notice
    and acceleration should be omitted. For Maine and New York, lenders
    should use foreclosure language based on these instructions and
    other FNMA/FHLMC forms that are not \"plain English\" forms provided
    that the language will authorize foreclosure in conformity with
    applicable law. The mortgage must include the Lender\'s right to a
    public sale of the Property, including a power of sale if legally
    permissible under the law of the jurisdiction in which the property
    is located, even if mortgages are usually foreclosed through a
    judicial proceeding. All rights to a deficiency must be preserved to
    the extent legally permissible, except as provided in special
    instructions in Handbook 4165.1 for Iowa, North Dakota or Wisconsin.
    New language is required at the end of Paragraph 18 regarding the
    new Single Family Mortgage Foreclosure Act which provides an
    alternative foreclosure procedure under Federal law.

b.  The paragraphs following Paragraph 18 should contain provisions
    required to adapt the mortgage to the laws and practices of the
    particular jurisdiction in which the Property is located. The text
    of these paragraphs should be the same as the FNMA/FHLMC non-uniform
    covenants for the jurisdiction in which the Property is located.
    Changes to the FNMA/FHLMC paragraphs and additional material may be
    included if needed to conform to requirements of state law or
    practice. The paragraph entitled \"Riders to this Security
    Instrument\" should be used as shown in the Model Mortgage Form
    instead of as shown in the FNMA/FHLMC forms.

c.  Any special language or notices required by applicable law should
    appear following the non-uniform covenants using the FNMA/FHLMC form
    for the jurisdiction as a guide. Signatures, etc.

[Signatures, etc.]{.underline}

Use the FNMA/FHLMC format at the end of the mortgage except that:

a.  Witness lines may be omitted if state and local law does not require
    witnesses for mortgages.

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d.  HUD does not require the Borrower\'s social security number to
    appear on the mortgage.