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201208502 2. Monthly Payment of Taxes, Insuranceand Other Charges.Borrower shall include in each monchly paymeut,together wit6 the principal and interest as set fort6 in the Note and any late charges,a sum for (a)taxes and special assessments levied or to be levied against the Property, (b)leasehold payments or ground rents on the Property,and(c)premiums for insurance required under pazagaph 4. In any year in which the Lender must pay a mortgage insurance premium to the Secretary of Housing and Urban Development("Secretary"), or in any year in which such premium would have been required if Lender still held the Security Instrument, each monthly payment shall also include either, (i)a sum for the annual mortgage insurance premium to be paid by Lender to the Secretary,or(ii)a monthly charge instead of a mortgage inswance premium if t6is Security Instrument is held by the Secretary, in a reasonable amount to be detetmined by the Secretary. Except for the monthly charge by the Secretary,these items are called "Escrow Items"and the sums paid to Lender are called"Escrow Funds." Lender may, at any time,collect and hold amounts for Escrow Items in an aggregate amount not to exceed the maximum amount that may be required for Borrower's escrow account under the Real Estate Settlement Procedures Act of 1974, 12 U.SG Section 2601 et seq. and implementing regulations, 24 CFR Part 3500, as they may be amended from time to time("RESPA"),except that the cushion or reserve permitted by RESPA for unanticipated disbursemenis or disbursements before the Boaower's payments aze available in the account may not be based on amouuts due foc the modgage insurance premium. If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA,Lender shall account to Borrower for the excess funds as required by RESPA. IFthe amounts of funds held by Lender at any time aze not su�cient to pay the Escrow Items when due,Lender may notify the Borrower and require Borrower to make up the shortage as pemutted by RESPA. The Escrow Funds are pledged as additional security for all sums secwed by this Security Instrument. If Botrower tenders to Lender the full payment of all such sums,Borrower's account shall be credited with the balance remaining for all installment items(a), (b),and(c)and any mortgage insurance premium installment that Lender 6as not become obligated to pay to the Secretary,and Lender shall promptly refund any excess funds to Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender,Borrower's account shall be credited with any balance remaining for all installments for items(a), (b),and(c). 3. Applicationof Payments.All payments under paragraphs 1 and 2 shall be applied by Lender as follows: First, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly c6acge by the Secretary instead of the monthly mortgage insurance premium; Second to any taxes, special assessments, leasehold paymenu or ground rents, and Cire, tlood and ot6er hazazd insurance premiums, as required; Thi to interest due under the Note; Fourth• to amodization of the principal of the Note; and Fift6 to late charges due under t6e Note. 4. Fire,Floodand Other Hazard Insurance.Borrower shall insure all improvements on the Property, whether now in existence or subsequently erected, against any hazards, casualties,and contingencies, including£ve, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requ'ves. Borrower shall also insure all impravements on the Property,whether now in existence or subsequently erected,against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies approved by Lender. The insurance policies and any renewals shall be held by Lender and shall include loss payable clauses in favor of,and in a form acceptable to,Lender. FHAMoreegeWITHME��E III�IIIIIIIIII�I�IIIIIIIIIII�IIIIIIIIIIIIIIIIIIiI ��I�tl�e VMP� VMP4N(NE)(1109}OD Wo11ersKluvrerFinar�clalServices q0 30960137 233 289 0 10 Psee3ot10 4J N"'