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201400194 2. Monthly Payment of Taxes, Insuranceand Other Charges.Borrower shall include in each monthly payment,together with the principal and interest as set forth 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 paragraph 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 aiso 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 insurance premium if this Security Instrument is held by the Secretary,in a reasonable amount to be determined by the Secretary.Except for the monthly charge by the Secretary,these items are calied "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 Bonower's escrow account under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. Section 2601 et seq. and implementing regulations, 12 C.F.R. Part 1024,as they may be amended from time to time("RESPA"),except that the cushion or reserve permitted by RESPA for unanticipated disbursements or disbursements before the Bonower's payments are available in the account may not be based on amounts due for the mortgage 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 requued by RESPA.If the amounts of funds held by Lender at any time are not sufficient to pay the Escrow Items when due,Lender may notify the Borrower and require Borrower to make up the shortage as permitted by RESPA. The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If Bonower tenders to Lender the full payment of all such sums,Bonower's account shall be credited with the balance remaining for all instaliment items(a),(b),and(c)and any mortgage insurance premium installment that Lender has 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,Bonower'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 chazge by the Secretary instead of the monthly mortgage insurance premium; S con to any taxes, special assessments, leasehold payments or ground rents, and fue, flood and other hazard insurance premiums,as required; Third, to interest due under the Note; Fourth, to amortization of the principal of the Note; and Fifth, to late charges due under the Note. 4. Fire,Floodand Other Hazard Insuranee.Bonower shall insure ail improvements on the Property, whether now in existence or subsequently erected,against any hazards, casuaities,and contingencies, including fire,for which Lender requires insurance.This insurance shall be maintained in the amounts and for the periods that Lender requires.Borrower shall also insure all improvements 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 canied with companies approved by Lender.The insurance policies and any rene�vals shall be held by Lender and shall include loss payable clauses in favor of,and in a form acceptable to,Lender. W P rs�Kluwe F nancial Serv ces II I I I'II'I I I I II'lll I I I II I(IIIIII I II I I I I I I I I I I I III VMP4N(N Page 32of�0 q03322311342 0233 324 0310