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201007735
<br />Tf the amounts held by Lender for Escrow �tezns exceed the amounts pertnitted to be held by RESPA, Lencier
<br />shall account to Borrower for the excess funds as required by RESPA, If the amounts of funds held by I,ender at any
<br />time are not sufficient to pay the Escrow Items when due, Lender may notify t�,e Borrower and require Borrower to
<br />make up the shortage as pernutted 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 suxns, Boarrower's account shall be credited with the balance
<br />remaining For all installment items (a), (b), and (c) and any mort�age insurance premium installment that Lender has
<br />not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Barrower.
<br />Tmrnediately prior to a foreclosure sale of the Property or its acquisitian by Lender, Borrawer's account shall be
<br />credited with any balance remaining for all installments for items (a), (l�), and (c).
<br />3. Application of Payments. All payments under paragraphs 1 anc12 shall be applied by Lender as follows:
<br />First, to the mortgage insurance premiwn 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 reyuired;
<br />Third, to interest due under the Nate;
<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. Borrower shall insure all improvements on the Property, whether
<br />naw in existence or subsequently erected, against any hazards, casualties, and contingencies, includin� fire, for which
<br />Lender requires insurance. This insurance shall be maintained in the amaunts and for the periods that Lender
<br />requires. Borrower shall alsc� 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 b� 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 />ln the event of loss, $orrower shall give Lender iixunediate notice by mail. Lender rnay make proof of loss if not
<br />made prampdy by Borrc�wer. Each insurance company concerned is hereby authorized and directed to rnake payment
<br />for such loss directly to Lender, instead of to Borrower and to Lender jointly. All ar any part of the insnrance
<br />proceeds may be applied by Lencler, 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, or (b) to the restorakion 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 arnount 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 txansfer af title to the Property that extinguishes
<br />the indebtedness, all right, title and interest of Borrower in and to insuranc:e policies in force shall pass to the
<br />purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Pcoperty; Borrower's I,�an Applicatian;
<br />Leaseholds. Barrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />ciays after the execution of this Security Instnunent (or within sixty days of a later sale or transfer of the Property)
<br />and shall conkinue to occupy the Property as Borrower's principal residence fot' at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue hardship for Borrower, or unless extenuating
<br />circumstances exist which are beyond Borrower's control. Borrower shall 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 inspect the Property if the Property is vacant
<br />or abandoned or the loan is in default. Lender may take reasonable actian to protect and preserve such vacant or
<br />� 4RWE) 1seo�1 Page 3 of 8 Initials:�J;�,
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