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<br />200810165
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<br />If the amounts held by Lender for Escrow Iternsexceed the amounts pennitted to be held by RESP A, Lender
<br />shall account to Borrower for the eXcess funds as required by RESPA. If the amounts of fundsheldby Lender at any
<br />time are not sufficient to pay tbe Escrow Items when due., Lender may notify the Borrower and require Borrower to
<br />make up the shortage as per.mitted by RESP A.
<br />The F..scrow l-unds are pledged as additional seCurity for all sums secured by this Security Instmment. Jf
<br />Borrower tenders to Lender the full payment of all such sums, Borrower' sacoount shall be credited with the balance
<br />remaining for all installment items (a), (b), and (c) and any mortgage insurance premium instaUment that Lender has
<br />not become obligated to pay to the Secretaty, and Lender shall promptly refund any excess funds to BorrOWer.
<br />Immediatelyprior to a foreclosure saleM the Property or its acquisition by Lender, Borrower's account shall be
<br />credited with any balance remaining foral! installments for herns (a), (b), and (c).
<br />3. Applicaticm of Payments. All payments under paragraphs 1 and 2 shall beappJi~ by Lender as follows;
<br />First,to the mortgage insurance premium to bep<ud by Lender to the Secretary or to the monthly charge by the
<br />Secretary inst~ad of the monthly mongage insurance premium; . . '. .' .
<br />. Second; to any taxes, sp~ial assessments, leasehold payments or ground rents, and fire, flood and olliet hazard.
<br />insurance premiums, is'required; .' . . .
<br />Third, to intereSt (iue \lllcIerthe Note; .
<br />Fourtb, to amortization of the prinCipal of the Note; and
<br />Fifth, to late charges due underth.e Note.
<br />4, Fire,' .1ood aild Other llazatd Insurance. Borrower shall insure all improvements on the Property, whether
<br />now in existence orSUQsequently erected, against any b~ards, casualties, and contingencies, including fire, for which
<br />Lender requires insurance. This insuranceshaU b.emaintained in the amounts and for the peri04s 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 canied with companies
<br />approved by Lender. The insurance policies and any renewals shan 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 mail. Lender may make proof of loss ifnot
<br />made promptly by Borrower. Each insurance company concertl~ is hereby authoriz.ed arid direct~ to make payment
<br />for such loss directly to Leilder, instead of to Borrower <ind 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 under the Note and
<br />this Security Instrument, nrst to any delinqueilt amounts applied in the order in paragraph 3, and then to prepayment
<br />of principal, or (b) to the restoration or repair of the d~ag~ Property. Any application of the proceeds to the
<br />principal shall not extend or 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 an outstanding
<br />indebtedness under the Note and. .this SecurityInstroment 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 Property that extinguishes
<br />the indebtedness, all right, tille 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; Borrow.er's Loan Application;
<br />Leaseholds. Borrower shall occppy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the. execution of this SeciirilY bislrument (or witllin sixty days ofa later sale or transfer of the Property)
<br />and shaIl continue to occupy the Property as Borrower's principal residence for at least one year after the date of
<br />occupancy, unless 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, daltlage or substantially change the Ptoperty 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 />~-4R(NEJ 10407).01
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<br />l"iIIQIS;~2B8104
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