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<br />200900330
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<br />Lender may, at any time, collect and hold amounts for Escrow Hems in an aggregate amount not to exceed the
<br />maximum amount that may be requiredf or Borrower's escrow account under the RealEstateSettlementproceduresAct
<br />of 1974, 12 U .S.c. Section 2601 et seq. and implementing regulations, 24 CFR Part 3500, as they may be amended
<br />from time Lo time ("RESP A"), except that the cushion or reserve permittedby RESP Afor unanticipateddisbursements
<br />or disbursementsbefore the Borrower's payments are available in the account may not be based on amounts due for the
<br />mortgage insurance premium.
<br />If the amounts held by Lender for Escrow Items exceed the amounts permittedto be held by RESP A, Lendershall
<br />accountto Borrowerfor the excess funds as requiredby RESP AIf the amounts of funds held by Lender at any time are
<br />not sufficient to pay the Escrow Items when due, Lendermay notify the Borrower and requireBorrowerto make up the
<br />shortage as permitted by RESP A
<br />The Escrow Funds are pledged as additional security for all sums securedby this Security Instrument.If Borrower
<br />tendersto Lenderthe full payment of all such sums, Borrower's account shall be creditedwith the balanceremainingfor
<br />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 Lendershall promptly refund any excess funds to Borrower. Immediate1yprior to
<br />a foreclosuresale 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), (b), and (c).
<br />3. Application of Payments. All payments underparagraphs1 and 2 shall be applied by Lenderas follows:
<br />Firs~ to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by the
<br />Secretaryinsteadof 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 />Thirg to interestdue under the Note;
<br />Fourth to amortizationof the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. }'ire, }'lood and Other Hazard Insurance. 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 />Lenderrequiresinsurance. This insurance shall be maintainedin the amounts and for the periods that Lender requires.
<br />Borrower shall also insure all improvementson the Property, whether now in existence or subsequentlyerected,against
<br />loss by floods to the extent requiredby the Secretary. All insurance shall be carriedwith companies approved by Lender.
<br />The insurance policies and any renewals shall be held by Lender and shall include loss payable clauses in favor of, and
<br />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 not
<br />made promptly by Borrower. Eachinsurancecompany concernedis hereby authorizedand directedto make payment for
<br />such loss directly to Lender, instead of to Borrower and to Lenderjointly. All or any part of the insurance proceeds may
<br />be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security
<br />I nstrument,first to any delinquent amounts applied in the order in paragraph3, and then to prepayment of principal, or
<br />(b) to the restorationor repair of the damagedProperty.Any applicationof the proceeds to the principal shall not extend
<br />or postpone the due date of the monthly payments which are referredto in paragraph2, or change the amount of such
<br />payments. Any excess insurance proceeds over an amountrequiredto pay all outstandingindebtednessunder the Note
<br />and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosure of this Security Instrumentor other transfer of title to the Property that extinguishes the
<br />indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
<br />S. 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 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 as Borrower's principal residence for at least one year after the date of occupancy,
<br />unless Lenderdeterminesthat requirementwill cause undue hardship for Borrower, or unless extenuating circumstances
<br />exist which are beyond Borrower's control. Borrower shall notify Lender of any extenuating circumstances. Borrower
<br />shall not commit waste or destroy, damage or substantially change the Property or allow the Property to deteriorate,
<br />reasonablewear and tear excepted. Lendermay inspect the Propertyif the Propertyis vacant or abandonedor the loan is
<br />in default. Lender may take reasonable action to protect and preserve such vacant or abandoned Property. Borrower
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