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<br />Procedures Act of 1974, 12 U.S.C. § 2601 et sea. and implementing regulations, 24 CFR Part 3500, as they may
<br />be amended from time to time ( "RESPA "), except that the cushion or reserve permitted by RESPA for
<br />unanticipated disbursements or disbursements before the Borrower's payments are available in the account may
<br />not be based on amounts due for the mortgage insurance premium.
<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender
<br />shall account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at
<br />any time is not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require
<br />Borrower to make up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If the
<br />Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the
<br />balance remaining for all installment items (a), (b), and (c) and any mortgage insurance premium installment that
<br />Lender has not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to
<br />Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's
<br />account shall be credited with any balance remaining for all installments for items (a), (b) and (c).
<br />3. Application of Payments. All payments under Paragraphs 1 and 2 shall be applied by Lender as follows:
<br />First, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by
<br />the Secretary instead of the monthly mortgage insurance premium;
<br />Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other
<br />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 />4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property,
<br />whether now in existence or subsequently erected, against any hazards, casualties, and contingencies, including
<br />fire, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods
<br />that Lender requires. Borrower shall also insure all improvements on the Property, whether now in existence or
<br />subsequently erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried
<br />with companies approved by Lender. The insurance policies and any renewals shall be held by Lender and shall
<br />include loss payable clauses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if
<br />not made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make
<br />payment for such loss directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the
<br />insurance proceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness under
<br />the Note and this Security Instrument, first to any delinquent amounts applied in the order in Paragraph 3, and
<br />then to prepayment of principal, or (b) to the restoration or repair of the damaged Property. Any application of
<br />the proceeds to the principal shall not extend or postpone the due date of the monthly payments which are referred
<br />to in Paragraph 2, or change the amount of such payments. Any excess insurance proceeds over an amount
<br />required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity
<br />legally entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer of title to the Property that
<br />extinguishes the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall
<br />pass to the purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan
<br />Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal
<br />residence within sixty days after the execution of this Security Instrument (or within sixty days of a later sale or
<br />transfer of the Property) and shall continue to occupy the Property as Borrower's principal residence for at least
<br />one year after the date of occupancy, unless Lender determines that requirement will cause undue hardship for
<br />Borrower, or unless extenuating circumstances exist which are beyond Borrower's control. Borrower shall notify
<br />Lender of any extenuating circumstances. Borrower shall not commit waste or destroy, damage or substantially
<br />change the Property or allow the Property to deteriorate, reasonable wear and tear excepted. Lender may inspect
<br />the Property if the Property is vacant or abandoned or the loan is in default. Lender may take reasonable action to
<br />protect and preserve such vacant or abandoned Property. Borrower shall also be in default if Borrower, during the
<br />NEBRASKA - FHA DEED OF TRUST - (04A6)
<br />MERFHANE (Amd 7AS)
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