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<br />2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, a11 payments accepted
<br />and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note; (b) prittcipal due
<br />under the Note; (c) amounts due under Section 3. Such payments shall be applied to each Periodic Payment in the order
<br />in which it became due. Any remaining amounts sha11 be applied first to late charges, second to any other amounts due
<br />under this Security Instrument, and then to reduce the principal balance of the Note.
<br />If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount
<br />to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one
<br />Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the
<br />Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after
<br />the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late
<br />charges due. Voluntary prepayments shall be applied first to any prepayment chazges and then as described in the Note.
<br />Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal' due under the Note shall
<br />not extend or postpone the due date, or change the amount, of the. Periodic Payments.
<br />3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments aze due under the Note,
<br />until the Note is paid in full, a sum (the "Funds") to provide for payment of amounts due for: (a) taxes and assessments
<br />and other items which can attain priority over this Security Instrument as a lien or encumbrance on the Properiy;
<br />(b) leasehold payments or ground rents on the Properly, if any; (c) premiums for any aad all inc��*a*+ce required by Lender
<br />under Section 5; and (d) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the
<br />payment of Mortgage Insurance premiums in accordance with the provisions of Section 10. These items are called
<br />`Bscrow Items:' At origination or at any time during the term of the Loan, Lender may require that Community
<br />Associarion Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be
<br />an Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this Secdon.
<br />Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's obligation to pay the Funds for
<br />any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at
<br />any time. Any such waiver may only be in writing. In the event of such waiver, Borrower sha11 pay directly, when and
<br />where payable, the amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if
<br />Lender requires, shall furnish to Lender receipts evidencing such payment within such time period as Lender may
<br />require. Borrower's obligation to make such payments and to provide receipts shall for a11 purposes be deemed to be a
<br />covenant and agreement contained in this Security Instrument, as the phrase "covenant and agreemenY' is used in Section
<br />9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower fails to pay the amount due
<br />for an Escrow Item, Lender may exercise its rights under Section 9 and pay such amount and Bonower shall then be
<br />obligated under Section 9 to repay to Lender any such amount. Lender may revoke the waiver as to any or all Escrow
<br />Items at any time by a norice given in accordance with Section 15 and, upon such revocarion, Borrower shall pay to
<br />Lender all Funds, and in such amounts, that are then required under this Section 3.
<br />Lender may, at any time, collect and hold Funds in an amount (a) sufficient to permit Lender to apply the Funds at
<br />the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA. Lender
<br />shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future
<br />Escrow Items or otherwise in accordance with Applicable Law.
<br />The Funds shall be held in a.n institution whose deposits are insured by a federal agency, instrumentality, or entity
<br />(including Lender, if Lender is an institurion whose deposits aze so insured) or in any Federal Home Loan Bank. Lender
<br />shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender sha11 not charge
<br />Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow Items,
<br />unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless an
<br />agreement is made in writing or Applicable Law requires interest to be paid on the Funds, Leader shall not be required to
<br />pay Borrower any interest or eamings on the Funds. Borrower and Lender can agree in writing, however, that interest
<br />sha11 be paid on the Funds. Lender shall give to Bonower, without charge, an annual accounting ofthe Funds as required
<br />by RESPA.
<br />If there is a surplus of Funds held in escrow, as defined under RESPA, Lender sha11 account to Borrower for the
<br />excess funds in accordance with RESPA. If there is a shortage of Funds held in escrow, as defined tmder RESPA, Lender
<br />shall notify Borrower as required by RESPA, and Borrower shall pay to Lender the amount necessary to make up the
<br />NEBRASKA -Single Famfly-Fannie Mae/Freddle Mac UNIFORM INSTRUMENT wlth MERSForm 3028 9/01
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<br />ias, ino. Borrower�s) Initlals
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