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<br />Lender may, at any time, callect and hold amaunts for Escrow Items in an aggregate amount not to exceed the
<br />maximum amount that m�ay 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 regulatipns, 24 CFR Part 3500, as they rnay be
<br />arnended frozn time to time ("RESPA"), except that the cushipn or reserve permitted by RESPA for unanticipated
<br />disbursernents 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 L.ender for Escrow Items exceed the arnounts permitted to be held by RESPA, Lender
<br />shall account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by L.ender at any
<br />time aze not suf�cient to pay the Escrow Iterns when due, Lender may notify the Borrower and require Bprrower to
<br />make up the shartage as permitted by RESPA.
<br />'The Escrow Funds are pledged as additional security for all sums secured by this Security Instruznent. If
<br />Borrower tendcrs Co 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 mprtgage 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 priar ta a foreclosure sala of the Property or its acquisition by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installrnents 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 premiurn;
<br />Second, to any taxes, special assessrnents, leasehold payrnents or ground rents, and fire, flood and other hazard
<br />insurance premiums, as xequired;
<br />Thir , to interest due under the Note;
<br />Fourth, to amortization of the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Bprrower shall insure all improvements on che Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, fox which
<br />Lender arequires insurance. This insuranc� shall be rnaintained in the arnounts and for the periods that Lender
<br />requires. Barrower 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 />appraved 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, Bprrower shall give I.ender immediate 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 L.ender 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, �rst to any delinquent amounts applied in the order in paragraph 3, and then to prepayment
<br />of principal, or (b) to the resCoration or repair of the damagcd Property. Any application af the proceeds to the
<br />principal shall not extend or postpone the due date of the rnpnthly payments which are referred to in paragraph 2, or
<br />change the amaunt of such payrnents. Any excess insurance proceeds over an amount required to pay all autstanding
<br />indebtedness under the Npte 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 transfer of title to the Froperty that extinguishes
<br />the indebtedness, all right, title and interest of Bprrower in and to insurance policies in force shall pass ta the
<br />purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Applicatian;
<br />Leaseholds. Borrower shall occupy, establish, and use the �'roperty 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 for at least one year after the date of
<br />occupancy, unless Lendar determines that requirement will cause undue hardship for Borrower, or unless extenuating
<br />circumstances exist which are beyond Borxower's cantrol. Borrower shall notify L.ender of any extenuating
<br />circurnstances. Borrower shall not comznit waste pr destroy, damage or substantially change the Property or allow the
<br />Property to deteriorate, reasonable wear and Cear excepted. I..ender 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 qr
<br />III IIIII'lll IIII�IIII IIIIIIIIII III IIIII I II'll I III
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