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<br />Lender may hold such unapplied funds until Borrower mares payment to bring the Loan current. If Borrower
<br />does not do so within a reasonable period of time, Leader shall either apply such funds or return them to
<br />Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note
<br />immediately prior to foreclosure. No offset or claim which Borrower might bave now or in the future against
<br />Lender shall relieve Borrower &vm making payments due under the Note and this Security Instrument or
<br />performing the covenants and agreements secured by this Security 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
<br />Note; (b) principal due under the Note; (c) amounts due under Section 3. Such payments shall be applied to
<br />each Periodic Payment in the order in which it became due. Any remaining amounts shall be applied first to
<br />late charges, second to any other amounts due under this Security Instrument, and then to reduce the principal
<br />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.
<br />If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to
<br />the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the
<br />extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments,
<br />such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any
<br />prepayment charges and then as described in the Note.
<br />Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the
<br />Note 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
<br />and assessments and other items which can attain priority over this Security Instrument as a lien or encumbrance
<br />on the Property; (b) leasehold payments or ground rents on the Property, if any. (c) premium for any and all
<br />insurance required by Lender under Section S; and (d) Mortgage Insurance premiums, if any, or any sums
<br />payable by Borrower to Linder in lieu of the payment of Mortgage Insurance premiums in accordance with the
<br />provisions of Section 10. These items are called "Escrow Items." At origination or at any time during the term
<br />of the Loan, Lender may require that Community Association Dues, Fees and Assessments, if any, be escrowed
<br />by Borrower, and such dues, fees and assessments shall be an Escrow Item. Borrower shall promptly furnish to
<br />Lender all notices of amounts to be paid under this Section. Borrower shall pay Lender the Funds for Escrow
<br />Ieens unless Lender waives Borrower's obligation to pay the Floods for any or all Escrow Items. Lender may
<br />waive Borrower's obligation to pay to Lender Funds for any or all Escrow Items at any time. Any such waiver
<br />may only be in writing. In the event of such waiver, Borrower shall pay directly, when and where payable, the
<br />amounts due for any Escrow Items for which payment of Funds has been waived by Lender and, if [,ender
<br />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 all purposes be deemed
<br />to be a covenant and agreement contained in this Security 11mrument, as the phrase "covenant and agreement"
<br />is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a waiver, and Borrower
<br />fails to pay the amount due for an Escrow Item, Lender may exercise its rights under Section 9 and pay such
<br />amount and Borrower shall then be obligated under Section 9 to repay to Lender any such amount. Lender may
<br />revoke the waiver as to any or all Escrow Items at any time by a notice given in accordance with Section 15
<br />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
<br />Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender can require
<br />under RESPA. Lender shall estimate the amount of Funds due on the basis of current data and reasonable
<br />estimates of expenditures 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,
<br />or entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home
<br />Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the time specified under
<br />RESPA. [.ender shall not charge Borrower for holding and applying the Funds, annually analyzing the escrow
<br />N ORAWA -Single Family -Funk Mae(Freddie Mac UPWORM 1N ULMENf form 3023 3199 (page 4 of 12 es)
<br />V,
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