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<br /> 2. Monthly Payment of Taxes, Insurance and Other Charges.Borrower shall include in each monthly
<br /> payment, together with the principal and interest as set forth in the Note and any late charges,a sum for
<br /> (a)taxes and special assessments levied or to be levied against the Property, (b)leasehold payments or
<br /> ground rents on the Property, and(c)premiums for insurance required under paragraph 4. In any year in
<br /> which the Lender must pay a mortgage insurance premium to the Secretary of Housing and Urban
<br /> Development("Secretary"), or in any year in which such premium would have been required if Lender still
<br /> held the Security Instrument,each monthly payment shall also include either:(i)a sum for the annual
<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 Secretary, in a reasonable amount to
<br /> be determined by the Secretary.Except for the monthly charge by the Secretary,these items are called
<br /> "Escrow Items"and the sums paid to Lender are called"Escrow Funds."
<br /> Lender may, at any time,collect and hold amounts for Escrow 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 are 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 Escrow Items exceed the amounts permitted to be held by RESPA, Lender
<br /> shall account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by
<br /> Lender at any time are not sufficient to pay the Escrow Items when due,Lender may notify the Borrower
<br /> and require Borrower to make up the shortage as permitted by RESPA.
<br /> The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument.
<br /> If Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with
<br /> the balance remaining for all installment items(a), (b), and(c)and any mortgage insurance premium
<br /> installment that Lender has not become obligated to pay to the Secretary,and Lender shall promptly
<br /> refund any excess funds to Borrower. Immediately prior to a foreclosure sale of the Property or its
<br /> acquisition by Lender, Borrower's account shall be credited with any balance remaining for all installments
<br /> 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 insurance premium to be paid by Lender to the Secretary or to the monthly charge 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
<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 Property,
<br /> whether now in existence or subsequently erected, against any hazards,casualties, and contingencies,
<br /> including fire,for which Lender requires insurance.This insurance shall be maintained in the amounts and
<br /> for the periods that Lender requires. Borrower shall also insure all improvements on the Property,whether
<br /> now in existence or subsequently erected, against loss by floods to the extent required by the Secretary.All
<br /> insurance shall be carried 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 /> 2013-2277860 100045700012145773 7545
<br /> FHA Mortgage WITH MEtS-NE Revised 4196
<br /> VMP S VMP4N(NE)111091
<br /> Wolters Kluwer Flnancal Sark,ices 4111/2013 10:38 AM Page3 of 10
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