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<br /> Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the maxknum
<br /> amount that may be required for Borrower's escrow account under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C.
<br /> � 2601 � se°• and implementing regulations, 24 CFR Part 3500, as they mey be amended from time to time ("RESPA"), except
<br /> that the cushbn or reserve permitted by RESPA for unanticipated disbursements or disbursements before the Borrowers
<br /> payments are availeble in the account may not be based on emounts due for the mortgege insurance premium.
<br /> If the amounts held by Lender for Escrow items exceed the amounts permitted to be held by RESPA, Lender shall account
<br /> to Borcower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any time are not sufficient to
<br /> pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to make up the shortage as permitted by
<br /> RESPA.
<br /> The Escrow Funds are piedped as additional secur'ity for all sums secured by this Security InsWment. If Borrower tenders
<br /> to Lender the full payment of all such sums, Borrower's account shall be credited with the balance remaining for all insta�knent
<br /> ftems (a), (b), and (c) and any mort�a�e insurance premium instalknent that Lender has not become obligated to pay to the
<br /> Secretery, and Lender shaA prompty retund any excess tunds to Borrower. Immediatey prior to a forecbsure sale of the Property
<br /> or its acquiskbn by Lender, Borrowers account shaU be credited with any balance remaining for all instaiknents for items (a), (b),
<br /> and (c).
<br /> 3. Application of Payments. n�i peymencs under Para9rapns i and 2 shall be applied by L�der as folbws:
<br /> First, to the mortgaqe insurance premium to be paid by l.ender to the Secretary or to the monthy charye by the Secretary
<br /> instead of the monthy mortgage insurance premium;
<br /> Second, to any texes, special assessments, leasehold payments or ground rents, and Nre, Hood and other hezard
<br /> insurance premiums, as required; ,
<br /> Third, to interest due under the Note;
<br /> Fourth, to amoRization of the principal of the Note; and
<br /> Fifth, to late charges due under the Note.
<br /> 4. Fire, Flood and Other Hazard Insurance. sorrower snau :,sure su improvements on the Property, wnecner
<br /> now in existence or subsequ�ty erected, against any hazards, casualties, end contingencies, includhg Hre, for wh�h Lender
<br /> requires insurance. This insurance shall be maintained 'n the amounts and for the periods that Lender requires. Borrower shall
<br /> also insure ail improvements on the Property, whether now in existence or subsequenty erected, against bss by fbods to the
<br /> extent required by the Secretary. All insurance shall be caRied with companies approved by Lender. The insurence policies and
<br /> any renewals shall be held by Lender and shall include bss payable clauses in favor of, and in a form acceptable to, Lender.
<br /> In the event of bss, Borrower shall give Lender immediate notice by mail. Lender may make proof of bss if not made
<br /> prompty by Borrower. Each insurance company concemed is hereby authorined and directed to make payment for such bss
<br /> directy to Lender, instead of to Borrower and to Lender jointy. All or any part of the insurance proceeds may be applied by
<br /> Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, first to any
<br /> delinquent amounts applied in the order in Paragraph 3, and th� to prepayment of principal, or (b) to the restoretion or repair of
<br /> the dameged Property. Any epplication of the proceeds to the pnc�ipal shall not extend or postpone the due dete of the
<br /> monthy payments which are referred to in Peregraph 2, or change the amount of such payments. My eoccess insurance
<br /> proceeds over an amount required to pay all outstand'ng indebtedness under the Note and this Security Instrument shall be paid
<br /> to the entity legelly entkled thereto.
<br /> In the event of forecbsure of this Security Instrument or other transfer of title to the Property that e�ctingukshes the
<br /> indebtedness, all right, title and interest of Borrower in and to insurance policies in force sheil pass to the purchaser.
<br /> 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan
<br /> AppliC8t1011; Leaseholds. Borrower shali xcupy, establish, and use the Property as Borrower's principal residence within
<br /> sbRy days atter the eocecution of this Security InsWment (or wkhin saty days of a later sale or transfer of the Property) and shail
<br /> contnue to occupy the Property as Borrower's principal residence for at least one year aRer the date of occupancy, unless
<br /> Lender determines that requ'rement will cause undue hardship for Borrower, or unless extenuating circumstances exist which are
<br /> beyond Borrower's control. Borrower shall notiy Lender of any wctenuating circumstances. Borrower shall not commit waste or
<br /> destroy, damage or substantialy change the Property or albw the Property to deteriorate, reasonable wear and tear eoccepted.
<br /> Lender may inspect the Property ff the Property is vacant or abandoned or the ban is in defauR. Lender may teke reasonable
<br /> action to protect end preserve such vacant or abandoned Property. Borrower shall also be in defauR ff BoROwer, during the ban
<br /> application process, gave materialy talse or inaccurate information or statements to Lender (or failed to provide Lender with any
<br /> material information) in connection with the ban evidenced by the Note, including, but not limited to, representations conceming
<br /> BoROwers occupancy of the Property as a principal resid�ce. If this Security Instrument is on a leasehold, Borrower shall
<br /> compy with the provisions of the lease. If Borrower acqu�es fee title to the Property, the leasehold and fee title shall not be
<br /> merged unless Lender agrees to the merger in writing.
<br /> 6. Condemnation. The p�oceBds of any award or claim for damages, direct or consequentisi, in connection wkh any
<br /> condemnatan or other taking of any part of the Property, or for conveyance in piece of condemnation, are hereby assipned and
<br /> shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this
<br /> Security Instrument. Lender shaU eppy such prxeeds to the reductan of the indebtedness under the Note and this Securky
<br /> Instrument, first to any delinquent emounts applied in the order provided in Paragraph 3, and then to prepayment of principal.
<br /> My application of the proceeds to the principal shall not extend or postpone the due date of the monthy payments, whbh are
<br /> referred to in Paragraph 2, or change the amount of such payments. My excess proceeds over an amount required to pay all
<br /> outstanding indebtedness under the Note and this Security Instrurr�nt shall be paid to the entity legaly entitled thereto.
<br /> 7. Charges to Borrower and Protection of Lender's Rights in the Property. sorrower snau pey au
<br /> govemm�tal or municipal charges, fines and impositions that are not included in Paragraph 2. Borrower shall pay these
<br /> obligations on time directly to the entity which is owed the payment. If failure to pay woua ed�ersey arr�cc �,ders �teresc �n
<br /> the Property, upon Lenders request BoROwer shall prompty fumish to Lender receipts evidencing these payments.
<br /> If Borrower fails to make these payments or the payments required by Paragreph 2, or fails to perform any other covenants
<br /> and agreements contahed in this Security Instrument, or there is a legal proceeding that mey sipni8ccenty affect Lender's riphts in
<br /> the Property (such as a proceed'ng in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do and
<br /> pay whatever is necessary to protect the value of the Property and Lender's rights in the Property, including payment of taxes,
<br /> hazard insurance and other items mentioned 'm Paragraph 2.
<br /> FSBI3.LM0(2/BB) Paps 2 of 5
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