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201000594
<br />in a reasonable amount to be determined by the Secretary. Except for the tnontllly charge by the Secretary, these
<br />items are called "Escrow Items" and the sums paid to Lender are called "Escrow Funds."
<br />Lender may, at arty lime, collect and hold amonnts for Escrow ltenns iun an aggregate amount not to exceed the
<br />' maximum amount that may be required far 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 tune ("RE5FA"), except that the cushion or reserve permitted by RESPA for unanticipated
<br />disbursements or disbursements before the Borrower's payments are available in the account may not be based on
<br />amounts due for the mortgage insurance premium.
<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by 1tESPA, Lender
<br />shall account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any
<br />time are not suffldent to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to
<br />make up the shortage as permitted by RESPA.
<br />The Escrow Funds 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 insurance premium installment that Lender has
<br />not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Borrower.
<br />Immediately 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 Lender as follows:
<br />First, 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 />Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard
<br />insurance premiums, as required;
<br />Third, to interest due under the Note;
<br />Fourth, to amortization of the prindpal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. Fire, Flood and Other Hazard Insm:wce. Borrower shall insure all improvements do tie Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<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 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 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 immediate notice by mail. Lender may make proof of loss if trot
<br />made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment
<br />for such lass directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance
<br />proceeds may be applied by Lender, at fts 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, or (b) to the restoration ar repair of the damaged Property. Any application pf the proceeds ko the
<br />principal shall not extend ar postpone the due date of the monthly payments which are referred to in paragraph 2, ar
<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 Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other dransfer of dtle 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 />321-273494$-703
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<br />WWW.DOGSDIRECT.CDM 01/22/2010 12:06 PM NEW LOAN
<br />M142048
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