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<br />200809797
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<br />If' the . amOWlt8 held by Lender for. E/;crow. Itelllii exceed' the 8Dl.ountsperIilitted. to be' held by RESP A, Lender
<br />shall account toBQrrower for theex,cess fundsasrequitedbyRESPA. If the amounts of funds held by Lender at any
<br />time are not sufficient to pay the Escrow Items when due, Lender maY notify the Borrower and require Borrower to
<br />makeup the shonag~aspennittedbyRESPA.. ..'
<br />The E/;crow Funds are pledge(i as additional . security for all sums secured by this Security Instrument. If
<br />Borrower tenders to Lenderthefull paymenfof all such sums, Borrower's account shall be credited with the balance
<br />remaining for all instalb:l1ent items (a)i (b) ,and (c) and any mortgage insurance premium installment that Lender has
<br />not become Obligated to pay to the Secretary, and Leodershall promptIyrefund any excess funds to Borrower,
<br />Immediately prior to a JOreclosure sale Of the Propeny or its acquisition by Lender, Borrower's account shall be
<br />credited with anybalance'remaining fotallinstallments for items {a),(b),and (c).
<br />3. Application of: Payments. AILpaymen.tsunder paragraphs 1 and2 shall be applied by Lender as follows:
<br />First, tothemongageinsurancepremium to be paid by Lender .tothe Secretary or to the monthly charge by the
<br />. Secretary instead' ofthe monthly ffiongage. insurance premium;
<br />. Second, toanytaxes,'specialassessments, leasehold payments or ground rents, and fire, flood and other hazard
<br />insurance premiums,as reql:lired;. .
<br />Third,.tointerestd\ieunderthe Note; ,
<br />Fourth, to amortization of the principal oithe Note; and
<br />Fifth, to latechar~es due under the Note.
<br />4. Fire, Fioodand Otber~dlnsurance.Borrower shall insure all improvements. on the Property ,whether
<br />now inexiswnceorsubsequentIy erected, <tgainstany hazards, casualties, and comingencies,includingfire, for which
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. Borrower.shalLalso insure alliIilprovementson the Property, wnether now in existence or subsequently
<br />erected, . against lossbyJloods 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 favoraf, . and in a form acceptable to; '. Lender.
<br />In the event oftoss, . Borrower shall give Lender immediate notice. by mail. Lender may make. proof of loss if not
<br />made promptly by.n(lrrower. 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. Allor any part of the insurance
<br />proceedsrnay be applied: by Lend. er,atits option, either (a).. to the reduction of the indebtedness under the Note and
<br />this Security Iostrumel1t, fust to any delinquent. amounts llpplied in the order in paragraph. 3, . and then 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 eXt.endor postpone the due date of the monthly payments which are referred to 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 tbe Note and this Security InstIUll1ent shall he paid to the entity legally entitled thereto.
<br />In the event offoreclosure of this Security Instrument or other transfer of title to the Property 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 />5. Occupancy, Preservation; Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Leaseholds. Borrower shalL occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the execution of this SecurltyIn5trument (or within sixty days of alater sale or transfer of the Property)
<br />and shall continue tococcupy the Property as Borrower's principal residence for at least one year after the date of
<br />occupancy, unlessI..endl:r determines that requirement will cause undue hardship for Borrower,' or unless extenuating
<br />circumstaDcesexistwhich are beyond Borrower's control. Borrower shall notify Lender of any extenuating
<br />circumstances. Borrower shall not eommitwasteor destroy, damage or substantially change the Property or allow the
<br />Property to deteriorate, . reasonable wear and tear excepted. Lender may. inspect the Property 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
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<br />Gt4RINEI (0407).Q1,
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<br />rag. 3 of 0
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<br />~. 2 288014
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<br />Initial., 1-
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