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N0120923�
<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 Security Instrument is held by the S�retary, in a reasonable amount to
<br />be determined by the S�retary. Except for the monthly charge by the Se,cretary, these items are called
<br />"Escrow Items" and the sums paid to Lender aze called "Escrow Funds."
<br />Lender may, at any time, coll�t and hold amounts for Fscrow Items in an aggregate amount not to exceed
<br />the maximum amount that may be required for Borrower's escrow account under the Real Estate Settlement
<br />Procedures Act of 1974, 12 U.S.C. Section 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 unanticipated disbursements or disbursements before the Borrower's payments aze available in
<br />the account may not be based on amounts due for the mortgage insurance premium.
<br />If the amounts held by Lender for Eserow Items excced 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 su�cient to pay the Fscrow Items when due, Lender may notify the Borrower
<br />and require Bonower to make up the shortage as permitted by RESPA.
<br />The Escrow Funds aze pledge� as addirional security for all sums se,cured by this Se�urity Instrument. If
<br />Bonower tenders to Lender the full payment of all such sums, Bonower's account shall be credited with the
<br />balance rem�ng for all installment items (a), (b), and (c) and any mortgage insurance premium installment
<br />that Lender has not become obligated to pay to the S�retary, and Lender shall promptly refund any exc�ess
<br />funds to Bonower. Immediately prior to a foreclosure sale of the Property or its acquisirion by Lender,
<br />Bonower'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 pazagraphs 1 and 2 shall be applied by Lender as follows:
<br />First, to the mortgage insurance premium to be paid by Lender to the S�retary or to the monthly charge by
<br />the S�retary instead of the monthly mortgage inc„ra„ce premium;
<br />Se�ond, to any taxes, sp�ial 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. Borrower shall insure all improvements on the Properly,
<br />whether now in existence or subsequently er�ted, against any hazards, casualties, and contingencies,
<br />including fire, for which Lender requires inc,�rance, 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�ted, against loss by floods to the extent required by the Seeretary. All
<br />insurance shall be carriefl with companies approved by Lender. The insurance policies and any renewals 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, Bonower shall give Lender irnmediate notice by mail. Lender may make proof of loss if
<br />not made promptly by Borrower. Each insurance company concemed is hereby authorized and directe� 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 oprion, either (a) to the re�iuction of the
<br />indebte�ness under the Note and this Se�urity Instrument, first to any delinquent amounts applied in the
<br />order in paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of the damaged
<br />Property. Any application of the proc,eeds to the principal shall not extend or postpone the due date of the
<br />FHA Deed of Trust-NE 4/96
<br />VMP � VMP4R(NE) (1109)
<br />Wolters Kluwer Financial Services Page 3 of 10
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