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Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the maximum
<br /> artlount that may be required for Borrower's escrow account under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C.
<br /> � § 2601 � se°• and implementing regulations, 24 CFR Part 3500, as they may be amended from time to time ("RESPA"), except
<br /> that the cush(on or reserve permitted by RESPA for unanticipated disbursements or disbursements before the Borrower's
<br /> payments are available in the account may not be based on amounts due for the mortgage insurance premium.
<br /> I( the emounts held by Lender (or Escrow Items exceed the emounts permitted to be held by RESPA, Lender shall account
<br /> to Borrower (or the excess tunds as required by RESPA. If the amounts of tunds held by Lender at any time ere not suHicient to
<br /> pay the Escrow Items when due, lender may notity the Borrower end require Borrower to make up the shortage as permkted by
<br /> RESPA.
<br /> The Escrow Funds are pledged as additionai security for all sums secured by this Securky Instrument. If Borrower tenders
<br /> to Lender the full payment of all such sums, BoROwer's account shall be credked with the baiance remaining }or all installment
<br /> Rems (a), (b), end (c) and any mortgage insurance premium installment that Lender has not become obligated to pay to the �
<br /> Secretary, end Lender shall promptly refund any excess tunds to Borrower. Immediately prior to a foreclosure sale of the Property �
<br /> or its acquiskion by Lender, Borrower's account shall be credited with any balance remeining for all installments for Rems (a), (b), +
<br /> and (c).
<br /> 3. Application of Payments. All payments under Paragraphs 1 and 2 shall be applied by Lender as follows: ~
<br /> First, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthy charge by the Secretary w
<br /> instead ot the monthly mortgege insurance premium; �
<br /> S@C011d, to any taxes, special assessments, leasehold payments or ground rents, and iire, flood and other hazard �
<br /> insurance premiums, as requked; �
<br /> Third, to InteresR due under the Note;
<br /> Fourth, to amortization o} the principa� of the Note; and
<br /> Fifth, to lete charges due under the Note.
<br /> 4. Fire, FIOOCI and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether
<br /> now in existence or subsequentiy erected, against any hazards, casuakies, and contingencies, including fke, tor which Lender
<br /> requtres insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shail
<br /> also fnsure ell improvements on the Property, whether now M existence or subsequently erected, against loss by iloods to the
<br /> extent requked by the Secretary. Ail insurance shall be carried wkh companies approved by Lender. The insurance policies and
<br /> any renewels shall be held by Lender and shall include loss payable clauses in favor of, and in a (orm ecceptable to, Lender.
<br /> In the event o( loss, Bonower shall give Lender immediate notice by mail. Lender may make proof of loss if not made
<br /> promptly by Borrower. Each k�surance company concerned is hereby authorized and directed to make payment for such loss
<br /> dkectly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be applied by
<br /> Lender, at ks option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, first to any
<br /> delinquent amounts appi'�ed in the order in Paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of
<br /> the damaged Property. Any application of the proceeds to the principal shall not extend or postpone the due date of the
<br /> monthly payments whbh are referred to in Paragraph 2, or change the amount of such payments. Any excess insurance
<br /> proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid
<br /> to the entity lega�y entitled thereto.
<br /> In the event of (oreclosure of this Security Instrument or other transfer of tRle to the Property that extingu(shes the
<br /> �debtedness, all right, tkle and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
<br /> 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan
<br /> Application; Leaseholds. Bonower shall occupy, establish, and use the Property as Bonower's principal residence within
<br /> sbcty days aiter the execution of this Security Instrument (or wfthin sbcty days of a later sale or transfer o} the Property) and shall
<br /> continue to occupy the Property as Borrower's principal residence tor at least one year after the date of occupancy, unless
<br /> Lender determines that requirement will cause undue hardship for Borrower, or unless extenuating circumstances exist wh�h are
<br /> beyond Borrower's control. Borrower shall notify Lender of any extenuating circumstances. BoROwer shall not commit waste or
<br /> destroy, damage or substantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted.
<br /> Lender may inspect the Property i( the Property is vacant or abendoned or the loan is in defauft. Lender may take reasonable
<br /> action to protect and preserve such vacant or abandoned Property. Borrower shall also be in defauft H Borrower, during the loan
<br /> appl�ation process, gave materially (alse or inaccurate information or statements to Lender (or failed to provide Lender with any
<br /> materfal infoRnallon) in connection with the loan evidenced by the Note, including, but not limited to, representatfons concerning
<br /> BoROwer's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold, Borrowe� shall
<br /> comply wfth the provisions ot the lease. If Borrower acquires tee title to the Property, the leasehold and fee title shall not be
<br /> merged unless Lender agrees to the merger in wr$ing.
<br /> s. Condemnation. The proceeds of any awerd or claim for damages, direct or consequential, in connecNon with any
<br /> condemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned and
<br /> shall be paid to Lender to the extent of the (uil amount of the indebtedness that remains unpaid under the Note and this
<br /> SecurRy Instrument. Lender shall apply such proceeds to the reduction ot the indebtedness under the Note and this Security
<br /> Instrument, iKSt to any delinquent amounts applied in the order provided in Paragraph 3, and then to prepayment oi principal.
<br /> My application of the proceeds to the principal shall not extend or postpone the due date of the monthly payments, which are
<br /> referred to in Peragraph 2, or change the amount of such payments. Any excess proceeds over an amount required to pay all
<br /> outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br /> 7. Charges to Borrower and Protection of Lender's Rights in the Property. Borrower shall pay au
<br /> govemmental or municipal charges, fines and 'anpositions that are not included in Paragraph 2. Borrower shall pay these
<br /> obligations on time directly to the entky which is owed the payment. If failure to pay would adversely affect Lender's interest in
<br /> the Property, upon Lender's request Borrower shall promptly turnish to Lender receipts evidencfng these payments.
<br /> Ii BoROwer fails to make these payments or the payments requtred by Paragraph 2, or tafls to perform eny other covenants
<br /> and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights fn
<br /> the Property (such 8s a proceeding in benkruptcy, tor condemnation or to enforce laws or regulations), then Lender may do and
<br /> pay whatever is necessary to protect the value of the Property and Lender's rights in the Property, k►cluding payment of taxes,
<br /> hazard fnsurance and other Rems mentioned in Paragraph 2.
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