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<br />200902768
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<br />Lender may, at any time, collect and hold amounts for Escrow It~ in an aggregate amount not to exceed the
<br />maximum amount that may be required for Borrower's escrow account Under the Real Estate Settlement. Procedures
<br />Act of 1974, 12 U.S.C. Section 2601 et seq. and implementing regulations, 24 CFR Part 3500, as they may be
<br />amended from time to time ("RESPA H), except that the cushion or res~rve permitted by RESPA for unanticipated
<br />disbursements or disbursements before the Borrower's payments are avauable in the account may not be based on
<br />amounts due for the mortgage insurance premium.. i
<br />If the amounts held by Lender for Escrow Items exceed the amourits permitted to be held by RESP A, Lender
<br />shall account to Borrower for the excess funds as required by RESPA. Ifithe amounts of funds held by Lender at any
<br />time are not sufficient to pay the Escrow Items when due, Lender may nbtify the Borrower and require Borrower to
<br />make up the shortage as pennitted by RESP A. I
<br />The Escrow Funds are pledged as additional security for all sw:Ps secured by this Security Instrument. If
<br />Borrower tenders to Lender the full payment of all such sums,Borrowerls account shall be credited with the balance
<br />remaining for all installment items (a), (b), aIid (c) and any mortgage~' premium installli1ent that Lender has
<br />not become obligated to pay to the Secretary, and. Lender shall pro tly refund any excess funds to Borrower.
<br />Immediately prior to a foreclosure sale of the Property or its acquisiti n by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), land (c).
<br />3. Application of Payment.. All payments under paragraphs 1 and 2 shall be applied by Lender as follows:
<br />E.i.at, to. the mortgage insurance premium to be paid by Lender to die Secretary or to the monthly charge by the
<br />Secretary instead of the monthly mortgage insurance premium; ! .
<br />~, to any taxes, special assessments, leasehold payments or ~und rents, and fire, flood and other haZard
<br />insurance premiums, as required; . I
<br />.. lhird., to interest due under the Note; :
<br />fmInb, to amortization of the principal of the Note; and
<br />fifth. to late charges due under the Note. i
<br />4. Fire, Flood aud Other Hazard lDaurance. Borrower shall ~ all improvements on the Property, whether
<br />now in existence or subseq1ientlyerected, against any hazards, casualties, imd contingencies, including tire, for which
<br />Lender requires insurance. This insurance shall be maintained in the Ilamounts 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. AlJ 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. I'
<br />Ii1 the event of loss, Borrower shall give Lender immediate notice by:mai1. Lender may make proof of loss if not
<br />made promptly by Borrower. Ea.ch.insurance company concerned is hereb~ authorized and directed to make payment
<br />for such loss directly to. Lender, instead of to Borrower and to Lendetj 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, first to any delinquent.amounts applied in the or(ler in paragraph 3, and then to prepayment
<br />of principal, or (b) to tberestoration or repair of the damaged Propmy. Any application of the proceeds to the
<br />principal shall not extend or postpone the due date of the monthly pa~ts which are referred to in paragraph 2, or
<br />change the amount of such payments. Any excess insurance proceeds ove~ an amount required to pay all outstanding
<br />indebtedness under the Note and this Security Instrument shall be paid to tI:1e 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, title and interest of Borrower in and to in$urance policies in force shall. pass to the
<br />purchaser. !
<br />5. Occupancy, Preservation, MaiDt....n(:O and Protection of the Property; Borrower'. Loan Application;
<br />Leasehold.. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the .execution of this Security Instrument (or wi~ ~ixty dars lof a later sale orttansfer of the Property)
<br />and shall continue to occupy the Property as Borrower's pnnclpal resl(lep.ce for at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue ~ship for Borrower; or unless extenuating
<br />circumstances exist which are beyond Borrower's control. Borrower lshall notify Lender of any extenuating
<br />circumstances. Borrower shall not commit waste or destroy, damage or substantially change the Property or allow the
<br />Property to deteriorate, reasonable wear and tear excepted. Lender may ~t the Property if the Property is vacant
<br />or abandoned or the loan is in default. Lender may take reasonable acti?n to protect and preserve such vacant or
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<br />~-4NINEJ 104071
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<br />Pill. 3 of 8
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<br />09-01"'000345
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