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<br /> until Borrower makes payment to bring the Loan current, If Borrower does not do so within a reasonable period of
<br /> time, Lender shall either apply such funds or return them to Borrower. if not applied earlier, such funds will be
<br /> applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim
<br /> which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due
<br /> under the Note and this Security Instrument or performing the covenants and agreements secured by this Security
<br /> Instrument,
<br /> 2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all payments
<br /> accepted and applied by Lender shall be applied in the following order of priority: (a) interest due under the Note;
<br /> (b)principal due under the Note; (c)amounts due under Section 3. Such payments shall be applied to each Periodic
<br /> Payment in the order in which it became due, Any remaining amounts shall be applied first to late charges, second
<br /> to any other amounts due 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
<br /> amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If
<br /> more than one Periodic Payment iso utstanding, Lender may apply any payment received from Borrower to the
<br /> repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that
<br /> any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may
<br /> be applied to any late charges due, Voluntary prepayments shall be applied first to any prepayment charges and then
<br /> as described in the Note.
<br /> Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note
<br /> shall 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 are due under the
<br /> Note, until the Note is paid in full, a sum (the "Funds") to provide for payment of amounts due for: (a)taxes and
<br /> assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance on the
<br /> Property; (b) leasehold payments or ground rents on the Property, if any; (c) premiums for any and all insurance
<br /> required by Lender under Section 5; and(d)Mortgage Insurance premiums, if any, or any sums payable by Borrower
<br /> to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 10.
<br /> These items are called"Escrow Items." At origination or at any time during the term of the Loan, Lender may require
<br /> that Community Association Dues, Fees, and Assessments, if any, be escrowed by Borrower, and such dues,fees and
<br /> assessments shall be an Escrow Item, Borrower shall promptly furnish to Lender all notices of amounts to be paid
<br /> under this Section, Borrower shall pay Lender the Funds for Escrow Items unless Lender waives Borrower's
<br /> obligation to pay the Funds for any or all Escrow Items. Lender may waive Borrower's obligation to pay to Lender
<br /> Funds for any or all Escrow Items at any time. Any such waiver may only be in writing, In the event of such waiver,
<br /> Borrower shall pay directly, when and where payable, the amounts due for any Escrow Items for which payment of
<br /> Funds has been waived by Lender and, if Lender requires, shall furnish to Lender receipts evidencing such payment
<br /> within such time period as Lender may require. Borrower's obligation to make such payments and to provide receipts
<br /> shall for all purposes be deemed to be a covenant and agreement contained in this Security Instrument, as the phrase
<br /> "covenant and agreement" is used in Section 9. if Borrower is obligated to pay Escrow Items directly, pursuant to
<br /> a waiver, and Borrower fails to pay the amount due for an Escrow item, Lender may exercise its rights under Section
<br /> 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount.
<br /> Lender may revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section
<br /> 15 and, upon such revocation, Borrower shall pay to Lender all Funds, and in such amounts, that are then required
<br /> 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
<br /> at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require under RESPA.
<br /> Lender shall estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures
<br /> of future Escrow Items or otherwise in accordance with Applicable Law,
<br /> The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or
<br /> entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan
<br /> Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under RESPA, Lender
<br /> NEBRASKA—Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT DocMagic erranM
<br /> Form 3028 1/01 Page 4 of 14 www.docmaglc.com
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