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201205459
<br />mortgage insurance premium to be paid by Lender to the Secretary, or (ii) a monthly charge instead of a
<br />mortgage insurance premium if this S�urity Instnunent is held by the Secretary, in a reasonable amount to
<br />be determined by the Secretary. Except for the monthly charge by the Seeretary, these items aze called
<br />"Escrow Items" and the sums paid to Lender are called "Escrow Funds."
<br />Lender may, at any tune, collect and hold amounts for Escrow Items in an aggregate amount not to exceed
<br />the maximum amount that may be required for Bonower's escrow account under the Real Estate Settlement
<br />Procedures Act of 1974, 12 U.S.C. S�tion 2601 et seq. and implementing regulations, 24 CFR Part 3500,
<br />as they may be amended from time to time ("RESPA"), except that the cushion or reserve permitted by
<br />RESPA for unanricipated disbursements or disbursements before the Borrower's payments are available in
<br />the account may not be based on amounts due for the mortgage in�,��nce premium.
<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender
<br />shall account to Bonower for the excess funds as required by RESPA. If the amounts of funds held by
<br />Lender at any time aze not sufficient to pay the Escrow Items when due, Lender may norify the Borrower
<br />and require Bonower to make up the shortage as permitted by RFSPA.
<br />The Escrow Funds aze pledged as addirional security for all sums secured by this Se�urity Instrument. If
<br />Borrower tenders to Lender the fu11 payment of all such sums, Bonower's account shall be cre�ited with the
<br />balance remaining for all installment items (a), (b), and (c) and any mortgage insurance premium i�t 1�lmg*+t
<br />that Lender has not be�ome obligated to pay to the S�retary, and Lender shall promptly refund atty excess
<br />funds to Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by I.ender,
<br />Borrower's account shall be credited with any balance remaining for all installments for items (a), (b), 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 monthly charge by
<br />the Se,cretary instead of the monthly mortgage in��ra.,ce premium;
<br />Sec;ond, to any taxes, special assessments, leasehold payments or ground rents, and fire, 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 Note; and
<br />Fifth, to late charges due under the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Bonower shall insure all improvements on the Property,
<br />whether now in existence or subsequently erected, against any hazards, casualries, and contingencies,
<br />including fire, for which Lender requires insurance. This insurance shall be maintained in the amounts and
<br />for the periods that Lender requires. Bonower shall also insure all improvements on the Property, whether
<br />now in existence or subsequently er�tefl, against loss by floods to the extent r�uired by the Secretary. A1i
<br />j insurance shall be carri� with companies approved by Lender. The insurance policies and any rene�vals shall
<br />be held by 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 Lender immediate notice by mail. Lender may make proof of loss if
<br />not made promptly by Borrower. Each insurance company concemed is hereby authorized and dir�ted to
<br />make payment for such loss directly to Lender, instead of to Bonower and to Lender jointly. All or any part
<br />of the insurance proceeds may be applied by Lender, at its option, either (a) to the reduction of the
<br />indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the
<br />i order in paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of the damaged
<br />Property. Any applicarion of the proceeds to the principal shall not extend or postpone the due date of the
<br />FHA Deed of Trust-NE 4l96
<br />VMP � VMP4RINE) (1109)
<br />Wolters Kluwer Financ(al Services Page 3 of 10
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