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201002123
<br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the
<br />maximum amountthatmay be requiredfor Borrower's escrow accouniunderthe RealEstateSettlementProceduresAct
<br />of 1974, 12 U.S.C. Section 2601 et seq. and implementingregulations, 24 CFR Part 3500, as they may be amended
<br />from time to time ("RESPA"), except that the cushion or reserve permittedby RESPAfor unanticipateddisbursements
<br />or disbursementsbeforethc Borrower's payments are available in the accountmay not be based on amounts due for the
<br />mortgage insurance premium.
<br />If the amountsheld by Lenderfor Escrow Items exceed the arnountspermittedto be held by RESPA,Lendershall
<br />accountto Borrowerfor the excess funds as requiredby RESPA.If the amountsof funds held by Lenderat any time are
<br />not sufficient to pay the Escrow Items when due, Lendermay notify the Borrower and requireBorrower to make up the
<br />shortage as permittedby RESPA.
<br />The Escrow Funds are pledged as additionalsecuritytor all sums securedby this Security Instrument.If Borrower
<br />tendersto Lenderthe full payment of all such sums, Borrower's accountshall be creditedwith the balanceremainingfor
<br />all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has not become
<br />obligatedto pay to the Secretary, and Lendershall promptlyrefund any excess funds to Borrower.Immediatelyprior to
<br />a foreclosure sale of the Property or its acquisitionby Lender,Borrower's account shall be creditedwith any balance
<br />remaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. All paymentsunderparagraphsl and 2 shallbe appliedby 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 thernonthlyrnortgageinsuranceprerniurn;
<br />Secon to any taxes, special assessments, leasehold payments ox ground rents, and fire, flood and other hazard
<br />insurance prenr-iums, as required;
<br />Thir to interestdue underthe Note;
<br />Fourt to amortizationof the principal of the Note; and
<br />Fift to late charges due under the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvementson the 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 maintainedin the amounts and for the periods that Lender requires.
<br />Borrower shall also insure all improvementson the Property,whethernow in existence or subsequentlyerected,against
<br />lass by floods to the extentrequiredby the Secretary.All insuranceshallbe carriedwith companiesapprovedby Lender.
<br />The insurancepolicies 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, Borrowershall give Lenderimmediatenoticeby mail. Lendermay rnakeproof of loss if not
<br />made promptlyby Borrower. Eachinsurance company concernedis hereby authorizedand dixectedto make payment for
<br />such loss directly to Lender,insteadof to Borrowerand to Lenderjaintly. All or any partof the insuranceproceedsmay
<br />be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security
<br />Instrument,first to any delinquentamountsappliedin the orderin paragraph3, and then to prepaymentof principal, or
<br />(b) to the restoxationor repaixof the damagedProperty.Any applicationof the proceedsto 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 insuranceproceedsovcr an arnountrequiredtopoy all outstandingindebtednessunderthc Note
<br />and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosureof this Security Instrumentor other transferof title to the Propertythat extinguishes the
<br />indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Leaseholds. Borrowershall occupy, establish, and use the Propertyas Borrower's principalresidencewithin 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 Lenderdetexminesthat requirementwill cause undue hardship far Borrower, or unless extenuatingcircumstances
<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 reasonableaction to protect and preserve such vacant or abandonedProperty.Borrowcr
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