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<br /> If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA,Lender shall
<br /> account to Bonower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any time
<br /> aze not sufficient to pay the Escrow Items when due,Lender may notify the Borrower and require Bonower to make up
<br /> the shortage as permitted by RESPA.
<br /> The Escrow Funds aze pledged as additional security for all sums secured by this Security Instrument. If Bonower
<br /> tenders to Lender the full payment of all such sums,Borrower's account shall be credited with the balance remaining for
<br /> all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has not become
<br /> obligated to pay to the Secretary,and Lender shall prompfly refund any excess funds to Borrower. Immediately prior to :
<br /> a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be credited with any balance
<br /> remaining for all installments for items(a),(b),and(c).
<br /> 3.Application of Payments.All payments under pazagraphs 1 and 2 shall be applied by Lender as follows:
<br /> F�, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monihly chazge by the
<br /> Secretary instead of the monthly mortgage insurance premium; :
<br /> Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard
<br /> insurance premiums,as required; :
<br /> Third,to interest due under the Note;
<br /> Fourth,to amortization of the principal of the Note;and
<br /> F�,to late charges due under the Note.
<br /> 4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether :
<br /> now in existence or subsequendy erected, against any hazards, casualties, and contingencies, including fire, for which
<br /> Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires.
<br /> Borrower shall also insure all improvements on the Property,whether now in existence or subsequenfly erected,against
<br /> loss by floods to the extent required by the Secretary. All insurance shall be carried with companies approved by Lender.
<br /> The insurance policies and any renewals shall be held by Lender and shall include loss payable clauses in favor of,and
<br /> in a form acceptable to,Lender. :
<br /> In the event of loss, Bonower shall give Lender immediate notice by mail. Lender may make proof of loss if not
<br /> made prompdy by Borrower.Each insurance company concerned is hereby authorized and directed to make payment for :
<br /> such loss direcdy to Lender,instead of to Borrower and to Lender joindy.All or any part of the insurance proceeds may
<br /> be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security :
<br /> Instrument,first to any delinquent amounts applied in the order in paragraph 3,and then to prepayment of principal,or :
<br /> (b)to the restoration or repair of the damaged Property.Any application of the proceeds to the principal shall not extend
<br /> or postpone the due date of the monthly payments which are referred to in paragraph 2,or change the amount of such
<br /> payments. Any excess insurance proceeds over an amount required to pay all outstanding indebtedness under the Note
<br /> and this Security Instrument shall be paid to the entity legally entided thereto.
<br /> In the event of foreclosure of this Security Instrument or other transfer of tide to the Property that extinguishes the
<br /> indebtedness,all right,tide and interest of Bonower 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 Application;
<br /> Leaseholds. Bonower shall occupy,establish,and use the Property as Bonower's principal residence within sixty days :
<br /> after the execution of this Security Instrument(or within sixty days of a later sale or transfer of the Property) and shall
<br /> continue to occupy the Property as Bonower's principal residence for at least one year after the date of occupancy, :
<br /> unless Lender determines that requirement will cause undue hardship for Borrower,or unless extenuating circumstances
<br /> exist which are beyond Bonower's control. Bonower shall notify Lender of any extenuating circumstances. Bonower
<br /> shall not commit waste or destroy, damage or substantially change the Property or allow the Property to deteriorate,
<br /> reasonable wear and tear excepted.Lender may inspect the Property if the Property is vacant or abandoned or the loan is
<br /> in default. Lender may take reasonable action to protect and preserve such vacant or abandoned Property. :
<br /> �-4R(NE)�asoa�.o� Page 3 of B ;
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