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<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender shall
<br />account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any time
<br />ate not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to make
<br />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 Borrower
<br />tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance remaining
<br />for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has not become
<br />obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Borrower. Immediately prior
<br />to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be credited with any balance
<br />remaining for all installments for items (a), (h), and (c). -
<br />3. Application of Payments. All payments tinder paragraphs I 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 the
<br />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 hazard
<br />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 Olhu Hazard Inwrmtce. Borrower shall insure all improvements on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. Borrower shall also insure all improvements on the Property, whether now in existence or subsequently
<br />erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies
<br />approved by Lender. The insurance policies and any renewals shall be held by Lender and shall include loss payable
<br />clauses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Borrower shall give Lender immediate notice by mad. Lender may make proof of loss if not
<br />made promptly by Borrower. Each insurance company concerned Is hereby authorized and directed to make payment
<br />for such loss directly to Lender, instead of to Borrower and to Lender Jointly. All or any part of the insurance
<br />proceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness tinder the Note and
<br />this Security Instrument, first to any delinquent amounts applied in the order in paragraph 3, and (hen to prepayment
<br />of principal, or (b) to the restoration or repair of the damaged Property. Any application of the proceeds to the
<br />principal shall not extend or postpone the due dale of the monthly payments which are referred (o in paragraph 2, or
<br />change the amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding
<br />indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer of title to the Properly that extinguishes
<br />the indebtedness, all right, title and interest of Borrower in and to Insurance policies in force shall pass to the
<br />purchaser.
<br />S. Occupancy, Preservation, Maintenance and Protection of the Property; Bortower's Loan Application;
<br />Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days
<br />after the execution of this Security Instrument (or within sixty days of a later sale or transfer of the Property) and shall
<br />continue to occupy the Property a, Borrower's principal residence for at least one year after the dale of occupancy,
<br />unless the Lender determines that requirement will cause undue hardship for Borrower, or unless extenuating
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any extenuating
<br />circumstances. Borrower shall not commit waste or destroy, damage or substantially change the Property or allow the
<br />Properly to deteriorate, reasonable wear and tear excepted. Lender may inspect the Properly if the Property Is vacant
<br />or abandoned or the loan is in default. Lender may take reasonable action to protect and preserve such vacant or
<br />abandoned Property. Borrower shall also be in default if Borrower, during the loan application process, gave materially
<br />false or inaccurate Information or statements to Lender (m failed to provide Lender with any material information)
<br />in connection with the loan evidenced by the Note, including, but not limited to, representations concerning Borrower's
<br />occupancy of the Property as a principal residence. If this Security Instrument Is on a leasehold, Borrower shall comply
<br />with the provisions of the lease. If Borrower acquires fee Itle to the Property, the leasehold and fee title shall not
<br />be merged unless Lender agrees to the merger in writing.
<br />FHA NEBRASKA DEED OF TRUST MESS 6/96
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