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201208501 mortgaee insurance pretnium to Ue paid by Lender to the Secretary, or(ii) a monthly charge instead of a rnartgage 3nsiErance premi�nn if this Security Instrument �s held by the Secretary, in a reasonable amount Eo Ue deternuned Uy the Secretary. Except for the monthly charge by the 5ecretary, tl�ese �tems are called "Escro�� lfen�s" and the sums paid to Lender are called "Gscrow runds." Lender may, at any time, collect and hold amounts for Escrow lterns in an a��re�ate amount not to exceed the maximum amount that may be requ�red for Bon'o�a�er's escrow account under the Real Estate Settiement Proceduz-es Act of 1974_ 12 U.S.C. Section 2601 et seq. and�it�plement�nb regulations, 24 CFR :'art 3500, as they rnay be amended fi•om time ko t�me("RESPA"), exceut t]zat the cushion o3•reserve pennitted by RESPA for unant�c�pated disbursements or disburse�nents before the Borro��er's pay�nents are availat�le in the account may not Ue based on amounts due for the mortgage insuranee premium. If the ainounts heid Uy Lender for Escro�� Iten,s exceed the amounts penr�cted to be i�eld by RESPA, Lender shatl accounf to Borrow�er for the excess funds as required by RESPA. If the amounts of funds held Uy Lender at a�tiy t3me are not suffic�ent to pay the Escrow ]terns when due, Lender inay notify the Borro��er and require Borrowver to make up Fhe shoz-tage as pennitted by RESPA. The�scro�v Funds are p(edged as addit�onal secur ity for all sums secured by th�s Security[nstrument. If Sorrawer tenders to Lende:the fult pa}nnent of ali such sums, Borrowe�-'s account shall be credited��rtti the balance reinaining for all�nstalhner�t items(aj, (bj, and(cj and any r��ortgage�nsurance prerr�ium instalkment that Lender has not become obliaatec"t to pay ta the Secretary. and Lender shall��romptly refund any excess funds to Borrower. hrnnediately pr�or to a foreclosure sale of the Pz-operTy or its acquis�tion by Ler�der, Borrower's account shall be credsted�vith any balance rema�n�ng for all �nstallments for items(aj, (bj, and(c}. 3. Applicationof Payments_Afl payments under paragrapns ! and 2 shall be applSed by Lender as follows: First, to the mortgage insurance premiinn to be pasd by i_.ender to the 5ecretary or to tlie monthly char�e by the Secretary instead of the monthly mortgage Snsurance premium; Seconci tp any taxes_ suecial assessments, leasehoid payments or�•ound�•ents, and fire, flood and other hazard msurance prei3i�un�s, as required; Third, to snterest due under the t�ote; Fourth. to amortizat�on of the prittc�pal of the ivote: and Fifth. to lafe char�es due under the Note. 4. Fire, Flaod and Other Hazard Insurance_Borrower shall insure all impT•ovements on the Prou�rty, �vllether no�v�n existence or subsequentty erec[ed, against any hazards. casualt�es, and contSrige��cies, incl�tding fire,for«�hic"n Lender reqLnres insurance. This insurance shal!be marntafned ln the amounts and for the penods that Lender requires. Borrower shall atso insure atl n�provements on the Property,��'hether rio�� in existence or subsequently erected,a�;auzst loss by floods eo the extent required Uy U�e Secretary. All insur�nce shalt be ca�ried tiir9th companies approved iiy Lender_ Tl�e msurance poCicies and any renewals shaTl be heid by Lender and shall tnciude Eoss payable clauses in favor of. and in a fonn acceptable to, Lender. In tl�e event of loss, Bon•o��er shall give Lender invr,ediate notice by maiL Lender,rray inal<e pa-oof of ioss if not made pron�ptly Uy Bon-ower. Each �nsw-ance compeny concerned is hereby authorized and directed to make payment for sticl� loss directly to Lender, instead of to Borroti��er and to Lender ja�ntly. All or any part of the�nstrrance proceeds may Ue appiied by iender,at its option. either(aj to the reductian of the indebtedness under the Note and this Security Instrument, first to any delinquent amounts applied in the order�n paragraph 3, and chen to prepayment of prinoipal, or(b) to Yhe restaration or reuair of the damaeed _ Propert�Any a�plication of the proceecis to the prin�ipal shall not extend or postpane the due date of the FHA Deed oi Trust-NE 4/98 VMP O VMPAR(tJE)(1 tOS1.tl0 1Kolters Kluwer Financfal Services Page 3 oi'10 4�.�k-1 ��9 G ._______..