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001699 to such policies. Grantor grants to American a security interest in all insurance policies required under this Mortgage and in the pro- ceeds paid under any of those policies. In the event of loss or casualty, Grantor shall give immediate written notice to the insur- ance carrier and American. Grantor authorizes American, at American's option, as attorney in fact for Grantor, to appear in and prosecute with Grantor, or failing Grantor's separate action, to undertake in American's name to make proof of loss, to adjust and compromise any claim under insurance policies, to appear in and pros- ecute any action arising from such insurance policies, to collect and receive insurange proceeds, and to deduct from such proceeds American's expenses incurred in the collection of such proceeds. Grantor further authorizes American, at American's sole option, to hold the balance of such proceeds to be used to reimburse Grantor for the costs of reconstruction or repair of the improvements, . or to apply the balance of such proceeds to the payment of the sums secured by this Deed of Trust, whether or not then due. If the insurance proceeds are held by American to be used to reimburse Grantor for the costs of restoration and repair of the improvements, -the improvements shall be restored to the equivalent of their condition immediately prior to the casualty, or such other condition as American may approve in writing. If the insurance proceeds are applied to the payment of the sums secured by this Deed of Trust, any such applica- tion of proceeds to principal shall be in the inverse order of matu- rity, if applicable. If the Property is sold in a foreclosure by American or the Property is acquired by American, all right, title, and interest of Grantor in and to any insurance policies and unearned premiums on such policies and in and to the proceeds of such policies resulting from damage to the Property prior to the sale or acquisi- tion shall pass to American. 4. In connection with the payments required under Paragraphs 2 and 3: (a) Grantor will deposit with American in equal monthly installments, an amount which will create a fund (the "Escrow Fund ") estimated by: American to be Buff icient to pay when due all taxes, special assessments, water and sewer rents, and insurance pre- miums required under this Deed of Trust, the Loan Agreement, or any other document executed in connection with the Loan Agreement, and all other charges imposed by law upon or against all or any part of the Property, ordinary and extraordinary, unforeseen as well as fore- seen (the "Impositions "). The Escrow Fund shall be neld by American without any allowance for interest, and need not be kept separate and apart from the funds of American. If American, in its sole discre- tion, determines that the Escrow Fund is or will be insufficient to pay such items when due, Grantor agrees co pay upon demand of American the amount determined necessary by American to increase the amount in the Escrow Fund to a sufficient level and to increase such montnly payments. In the event that American does not waive the _3_ a�l