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200904417
<br />IF the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by 1ZESPA, bender
<br />shall account to Borrower fur the excess funds as required by IZESPA_ Tf the amounts of funds held by Lender of any
<br />time are not sufficient to pay the Escrow Items when due, Lender tray notify the Harrower and require Borrower to
<br />make; up the shartagc as pctwittcd by RESPA.
<br />T'he Escrow Nunds are pledged as additional security for all sums secured by this Security Instrument. If
<br />Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance
<br />remaining for all installment items (a), (b), and (c) and any mortgage ins,,uance premium installment that Lender has
<br />not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to 13orrower-
<br />ItxYmediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. All payments under paragraphs 1 and 2 shall be applied by Louder as follows:
<br />1~irs~ to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by the
<br />Secretary instead of the monthly mortgage insurance premium;
<br />Secun to any faxes, tipecial assessmGntb, laaschuld paytnants ur ground rents, and firs, Ruud and other hazard
<br />insurance premiums, as required;
<br />Third, to interest due under the Nate;
<br />Fourth to amortization of the principal of the Note; and
<br />f•`ifth, to late charges due under the Nate.
<br />4. Flire, flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether
<br />now in existence or subsequently crcctecl, against arty Itazards, casualties, and cantiugencies, including fire, far wltich
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. Borrower shall also insure all improvements an 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 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.
<br />In the event of loss, Borrower shall give Lender inunediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Borrower. 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. All. ar auy 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 order in paragraph 3, and then to prepayment
<br />of principal, ur (h) lu the restoration or repair of the damaged 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 all outstanding
<br />indebtedness under the Note and this Security lnsttument 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 extingttishes
<br />the indebtedness, all right, title and interest of Borrower in and to insuranec policies in force shall pass to the
<br />purchaser.
<br />S. Occupancy, Preser~~atian, 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 Security Instrument (or within sixty days of a later sale or transfer of the Property)
<br />and shall continue to occupy the Property as Borrower's principal residence fur at least are year after the date of
<br />occupancy, unless Lender determines that. requirement. will cause undue hardship for Borrower, or unless extenuating
<br />circwnstances exist which are beyond Borrower's control. Borrower shall notify Lender of any extenuating
<br />circumstances. $onrowcr shall not commit waste or destroy, damage or substantially change the Property or allow the
<br />Property to deteriorate, reasonable wear and tear excepted. Lander 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
<br />~~(t~E11980'I) Page3of9 A I C~- ~!
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