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<br /> U.-RECORDED
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<br /> 105405
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<br /> if the amounts held by I.en-der for Fscrow Items exceed the amounts perritted to be held by RESPA,
<br /> Lender shall account to Borrowe for the excr;;s funds as required by RESPA. It the amounts of funds held by
<br /> I.c,nder at any time are not sufficisnt to pay the Escrow Items when due, Lender may notify the Borro.er and
<br /> require Borrower to make up the shortage as permitted by RMPA.
<br /> The I-.scrow Funds are pledged as additional security for al: r!tms secured by this Security Instrument. If
<br /> Borrower tenders to Leader the full payment of all such sums, Borrowv is account shall be credited with the
<br /> balance remaining; for all installment items (a), (b), and (c) and any mortgage insurance premium installment
<br /> that I,ende: has not become obligated to pay to the Secretary, and Lender shall promptly refund any excess
<br /> iumds to Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender,
<br /> Borrower's account shall be credited with any balance remaining for all installments for items (a), (b), and
<br /> (c)•
<br /> 3. Application of Payments. All payments under paragraphs I and 2 shall be applied by Lender as
<br /> rolluws:
<br /> First, to the mortgage insurance premium to be paid by Leader to the Secretary or to the monthly charge
<br /> by the Secretary instead of the monthly mortgage insurance premium;
<br /> Second, to any taxes, special as^e-,3ments, leasehold payments or ground rents, and firo-, flood and other
<br /> hazard insurance premiums, as required;
<br /> Third, to interest due under the Note;
<br /> Fourth, to amortization of the principal of the Mote; and
<br /> fifth, to late charges due under the Note.
<br /> .4. Tore, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property,
<br /> whether now in existence or subsequently erected, against any hazards, casualtie^, and contingencies, including
<br /> fire, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the
<br /> period: that bender requires. Borrower shall also iiisvrr all improvements on the Property, whether now in
<br /> existence or subsequently erected, against loss by floods .o the extent required by the Secretary. All insurance
<br /> shall be carried with companies approved by Lender. the insurance policies and any renewals shall be held by
<br /> Lender and shall include loss payable clauses in .favor of, and in a form acceptable to, Lender.
<br /> In the event of loss, Borrower shall give Utrider immediate notice by mail. "Lender may make proof of
<br /> fur; if not made promptly by Borrower. Each insurance company concerned is hereby authorized and directed
<br /> to make payment for such loss directly to '...ender, instead of to Borrower and to I.,ender jointly. All or any
<br /> part of the insurance proceeds may be app,.ied by Lender, at its option, either (a) to the reduction of the
<br /> indebtedness Under the Mote and this Security Instrument, first to any delinquent amounts applied in the order
<br /> in paragraph 3, and then to prepayment of principal. or (b) to the restoration or repair of the damaged
<br /> Property. Any application of the proceeds to the principal shall not extend or postpone the due date of the
<br /> monthly payments which are referred to in paragraph 2, or change the amount of such payments. Any excess
<br /> insurance proceeds over an amount required to pay all outstanding indebtedness under the Note and this
<br /> Security Instrument shall be paid to the entity legally entitled thereto.
<br /> In the event of foreclosure of this Security Instrument or other transfer of title to the Property that
<br /> extingruishc-, the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall
<br /> pass to the purchasldr.
<br /> 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan
<br /> Application Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal
<br /> residence within sixty days after the execution o't this Security Instrument (or within sixty days of a later sate or
<br /> transfer of the Property) and shall continue to occupy the Property as Borrower's principal residence for at least
<br /> one year after the date of occupancy, unless Lender determines that requirement will cause undue hardship for
<br /> Borrower, or unless extenuating circumstances exist which are beyond Borrower's control. Borrower shall
<br /> notify Lender of anv extenuating circumstances, Borrower shall not commit waste or destroy, damage or
<br /> subt;tantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted.
<br /> I,cnder may insr~ct the I'loperty if the Property is vacant or abandoned or the loan is in default. Lender may
<br /> take reasonable a,tiori to protect and preserve such vacant or abandoned Property. Borrower shall also be in
<br /> default if Borrower, during the loan application process, gave materially false nr inaccurate information o:•
<br /> state nentsto Lc,nder (or failed to provide Lender with any material information) in connection with the loan
<br /> -4R(NE) (Al10~1.07 Initials: I
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