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claim which Borrower might have now or in the future against Lender shall relieve Borrower from making
<br />payments due under the Note and this Security Instrument or performing the covenants and agreements
<br />secured by this Security Instrument.
<br />2. Application of Payments or Proceeds. Except as otherwise described in this Section 2, all
<br />payments accepted and applied by Lender shall be applied in the following order of priority:
<br />First, to the Mortgage Insurance premiums to be paid by Lender to the Secretary or the monthly
<br />charge by the Secretary instead of the monthly mortgage insurance premiums;
<br />Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood
<br />and other 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 />Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due
<br />under the Note shall not extend or postpone the due date, or change the amount of the Periodic
<br />Payments.
<br />3. Funds for Escrow Items. Borrower shall pay to Lender on the day Periodic Payments are
<br />due under the Note, until the Note is paid in full, a sum (the "Funds ") to provide for payment of amounts
<br />due for: (a) taxes and assessments and other items which can attain priority over this Security Instrument
<br />as a lien or encumbrance on the Property; (b) leasehold payments or ground rents on the Property, if any;
<br />(c) premiums for any and all insurance required by Lender under Section 5; and (d) Mortgage Insurance
<br />premiums to be paid by Lender to the Secretary or the monthly charge by the Secretary instead of the
<br />monthly Mortgage Insurance premiums. These items are called "Escrow Items." At origination or at any
<br />time during the term of the Loan, Lender may require that Community Association Dues, Fees, and
<br />Assessments, if any, be escrowed by Borrower, and such dues, fees and assessments shall be an
<br />Escrow Item. Borrower shall promptly furnish to Lender all notices of amounts to be paid under this
<br />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
<br />Lender Funds for any or all Escrow Items at any time. Any such waiver may only be in writing. In the
<br />event of such waiver, Borrower shall pay directly, when and where payable, the amounts due for any
<br />Escrow Items for which payment of Funds has been waived by Lender and, if Lender requires, shall
<br />furnish to Lender receipts evidencing such payment within such time period as Lender may require.
<br />Borrower's obligation to make such payments and to provide receipts shall for all purposes be deemed to
<br />be a covenant and agreement contained in this Security Instrument, as the phrase "covenant and
<br />agreement" is used in Section 9. If Borrower is obligated to pay Escrow Items directly, pursuant to a
<br />waiver, and Borrower fails to pay the amount due for an Escrow Item, Lender may exercise its rights
<br />under Section 9 and pay such amount and Borrower shall then be obligated under Section 9 to repay to
<br />Lender any such amount. Lender may revoke the waiver as to any or all Escrow Items at any time by a
<br />notice given in accordance with Section 14 and, upon such revocation, Borrower shall pay to Lender all
<br />Funds, and in such amounts, that are then required under this Section 3.
<br />Lender may, at any time, collect and hold Funds in an amount (a) sufficient to permit Lender to
<br />apply the Funds at the time specified under RESPA, and (b) not to exceed the maximum amount a lender
<br />can require under RESPA. Lender shall estimate the amount of Funds due on the basis of current data
<br />and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with
<br />Applicable Law.
<br />The Funds shall be held in an institution whose deposits are insured by a federal agency,
<br />instrumentality, or entity (including Lender, if Lender is an institution whose deposits are so insured) or in
<br />any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items no later than the
<br />time specified under RESPA. Lender shall not charge Borrower for holding and applying the Funds,
<br />annually analyzing the escrow account, or verifying the Escrow Items, unless Lender pays Borrower
<br />interest on the Funds and Applicable Law permits Lender to make such a charge Un ess an agreement is
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<br />Page 4 of 13 Publ shed September 2014
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