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�Q�20761�
<br />from time to time ("RESPA"), except that the cushion or reserve permitted by RESPA for unanricipated disbursements
<br />or disbursements before the Bonower' s payments are available in the account may not be based on amounts due for
<br />the mortgage insurance premium.
<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 />are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Bonower to make
<br />up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additional security for all sums secuted by ttris Security Instrument. If
<br />Bonower tenders to Lender the full payment of all such sums, Borrower' s account sha11 be credited with the balance
<br />remaining for all installment items (a), (b), and (c) aad any mortgage insurance premium installment that Lender has
<br />not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Borrower.
<br />Immediately prior to a foreclosure sale of the Property or its acquisirion by Lender, Bonower' s account shall be
<br />credited with any balance remaining for a11 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 insutance premium to be paid by Lender to the Secretary or to the monthly chatge by
<br />the 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 />TfIIItD, 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. Borrower sha11 insure all improvements on the Property,
<br />whether now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire,
<br />for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that
<br />Lender requires. Bonower shall also insure all improvements on the Properiy, whether now in existence or
<br />subsequently erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried with
<br />companies approved by Lender. The insurance policies and any renewals shall be held by Lender and sha11 include
<br />loss payable clauses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Borrower sha11 give Lender immediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Bonower. Each insurance company concerned is hereby authorized and directed to make payment
<br />for such loss directly to Lender, instead of to Bonower and to Lender jointly. All or any part of the insurance
<br />proceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and
<br />this Security Instrument, first to any delinquent amounts applied in the order in pazagraph 3, and then to prepayment
<br />of principal, or (b) to the restoration or repair of the damaged Property. Any application of the proceeds to the
<br />principal shall not extend or postpone the due date of the monthly payments wluch are referred to in pazagraph 2, or
<br />change the amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding
<br />indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of for�losure of this Security Instrument or other transfer of title to the Property thax extinguishes the
<br />indebtedness, all right, tifle and interest of Borrower in and to inc�r�ce policies in force sha11 pass to the purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Leaseholds. Bonower sha11 occupy, esta.blish, and use the Property as Bonower's principal residence within sixty
<br />da.ys after the execution of this Security Instrument (or within sixty days of a later sale or transfer of the Property)
<br />and shall continue to occupy the Property as Bonower' s principal residence for at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue hazdship for Bonower, or unless extenuating
<br />circumstances exist which are beyond Borrower' s control. Bonower shall notify Lender of any extenuating
<br />circumstances. Bonower shall not commit waste or destroy, damage or substantially change the Property or a11ow
<br />the Property to deteriorate, reasonable wear and tear excepted. Lender may inspect the Property if the Property is
<br />vacant or abandoned or the loan is in default. Lender may ta.ke reasonable action to protect and preserve such vacant
<br />or abandoned Property. Borrower sha11 also be in default if Bonower, during the loan application process, gave
<br />FHA N�RPSKA D� OF TRUST - MERS DadYlag/c�
<br />NEDOTZ.FHA 07/03/12 Page 3 of 9 www.docmagic.wm
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