OF
RESCISSION, SET-OFF, COUNTERCLAIM OR DEFENSE HAS BEEN ASSERTED WITH RESPECT
THERETO, AND NO MORTGAGOR IN RESPECT OF THE LOAN WAS A DEBTOR IN ANY STATE OR
FEDERAL BANKRUPTCY OR INSOLVENCY PROCEEDING AT THE TIME THE LOAN WAS ORIGINATED.
I-4
(F)
HAZARD INSURANCE. THE MORTGAGED PROPERTY
IS INSURED BY A FIRE AND EXTENDED PERILS INSURANCE POLICY, ISSUED BY A QUALIFIED
INSURER, AND SUCH OTHER HAZARDS AS ARE CUSTOMARY IN THE AREA WHERE THE MORTGAGED
PROPERTY IS LOCATED, AND TO THE EXTENT REQUIRED BY THE SELLER AS OF THE DATE OF
ORIGINATION CONSISTENT WITH THE UNDERWRITING GUIDELINES, AGAINST EARTHQUAKE AND
OTHER RISKS INSURED AGAINST BY PERSONS OPERATING LIKE PROPERTIES IN THE LOCALITY
OF THE MORTGAGED PROPERTY, IN AN AMOUNT NOT LESS THAN THE GREATEST OF (I) 100%
OF THE REPLACEMENT COST OF ALL IMPROVEMENTS TO THE MORTGAGED PROPERTY, (II)
EITHER (A) THE OUTSTANDING PRINCIPAL BALANCE OF THE LOAN WITH RESPECT TO EACH
FIRST LIEN LOAN OR (B) WITH RESPECT TO EACH SECOND LIEN LOAN, THE SUM OF THE
OUTSTANDING PRINCIPAL BALANCE OF THE FIRST LIEN LOAN AND THE OUTSTANDING
PRINCIPAL BALANCE OF THE SECOND LIEN LOAN, (III) THE AMOUNT NECESSARY TO AVOID
THE OPERATION OF ANY CO-INSURANCE PROVISIONS WITH RESPECT TO THE MORTGAGED
PROPERTY, AND CONSISTENT WITH THE AMOUNT THAT WOULD HAVE BEEN REQUIRED AS OF THE
DATE OF ORIGINATION IN ACCORDANCE WITH THE UNDERWRITING GUIDELINES OR (IV) THE
AMOUNT NECESSARY TO FULLY COMPENSATE FOR ANY DAMAGE OR LOSS TO THE IMPROVEMENTS
THAT ARE A PART OF SUCH PROPERTY ON A REPLACEMENT COST BASIS. IF ANY PORTION OF
THE MORTGAGED PROPERTY IS IN AN AREA IDENTIFIED BY ANY FEDERAL GOVERNMENTAL
AUTHORITY AS HAVING SPECIAL FLOOD HAZARDS, AND FLOOD INSURANCE IS AVAILABLE, A
FLOOD INSURANCE POLICY MEETING THE CURRENT GUIDELINES OF THE FEDERAL INSURANCE
ADMINISTRATION IS IN EFFECT WITH A GENERALLY ACCEPTABLE INSURANCE CARRIER, IN AN
AMOUNT REPRESENTING COVERAGE NOT LESS THAN THE LEAST OF (1) THE OUTSTANDING
PRINCIPAL BALANCE OF THE LOAN, (2) THE FULL INSURABLE VALUE OF THE MORTGAGED
PROPERTY, AND (3) THE MAXIMUM AMOUNT OF INSURANCE AVAILABLE UNDER THE FLOOD
DISASTER PROTECTION ACT OF 1973, AS AMENDED. ALL SUCH INSURANCE POLICIES
(COLLECTIVELY, THE "HAZARD INSURANCE POLICY") CONTAIN A STANDARD MORTGAGEE
CLAUSE NAMING THE SELLER, ITS SUCCESSORS AND ASSIGNS (INCLUDING WITHOUT
LIMITATION, SUBSEQUENT OWNERS OF THE LOAN), AS MORTGAGEE, AND MAY NOT BE
REDUCED, TERMINATED OR CANCELED WITHOUT 30 DAYS' PRIOR WRITTEN NOTICE TO THE
MORTGAGEE. NO SUCH NOTICE HAS BEEN RECEIVED BY THE SELLER. ALL PREMIUMS DUE AND
OWING ON SUCH INSURANCE POLICY HAVE BEEN PAID. THE RELATED MORTGAGE OBLIGATES
THE MORTGAGOR TO MAINTAIN ALL SUCH INSURANCE AND, AT SUCH MORTGAGOR'S FAILURE TO
DO SO, AUTHORIZES THE MORTGAGEE TO MAINTAIN SUCH INSURANCE AT THE MORTGAGOR'S
COST AND EXPENSE AND TO SEEK REIMBURSEMENT THEREFOR FROM SUCH MORTGAGOR. WHERE
REQUIRED BY STATE LAW OR REGULATION, THE MORTGAGOR HAS BEEN GIVEN AN OPPORTUNITY
TO CHOOSE THE CARRIER OF THE REQUIRED HAZARD INSURANCE, PROVIDED THE POLICY IS
NOT A "MASTER" OR "BLANKET" HAZARD INSURANCE POLICY COVERING A CONDOMINIUM, OR
ANY HAZARD INSURANCE