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<br />If the amaunks hcld by I.ender for �scrow Ttems exce�d the amounts permitted ta b� held by RESPA, Lender
<br />shall account to Borrower for the excess funds as rcquired by RESPA. Tf the amounts of funds held by Lender at any
<br />time are not suffi�ient to pay the Escrow Itcros when due, Lender may notify the Borrawer and require T3orrower to
<br />make up the shortage as perrnitted by RESPA.
<br />Th�: Fscrow Funds are pledged as additional security for all sums secured by this 5ecurity Instrument. If
<br />Borrawwr C�nders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance
<br />rernaining for all installment it�ms (a), (b), and (c) and any mortgage insuranc:e premium installment that Lc:nder has
<br />n�t becorne obligated to pay tU the Secretary, and Lender shall pramptly r�fund any excess funds to Borrower.
<br />Irnmediately prior to a foreclosure sale of the Property or its acquisition by I.ender, 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 I.ender as follows:
<br />First, to the mortgag� insurance premium to be paid by Lender to th� Sscretary 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 ar graund rents, and fire, flood and other hazard
<br />insurance premiums, as required;
<br />Third, to int�r�st due under the Note;
<br />Fourth, ta arrtortization of the principal of ths Nate; and
<br />Fifth, to late charges due under the No[�.
<br />4. Fire, Flood and Other Hazard Insurance. Barrawer shall insure all improvements on th� Prop�rty, whether
<br />now in existenc� ar subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />Lender requires insuranc�. This insurance shall be maintain�d in the amaunts and for the periods that Lender
<br />requires. Borrower shall also insure all improvements on the Praperty, whether now in existence or subsequcntly
<br />erected, against lc�ss by flaods to the extent required by lhe S�cretary. All insurance shall be carried with compani�s
<br />approved by I,ender. The insurance policies and any renewals shall be held by L.ender and shall include 1C�ss payable
<br />clauses in favar of, and in a f'orm acceptablr ta, I,ender.
<br />In th� event of loss, Borrower shall give Lender immediate notice by mail. Lend�r may make proof of loss if not
<br />made promptly by Bonower. F�ch insurance company concerned is hereby authorized and directed to make payment
<br />fc�r such lass directly to T.ender, instc:ad af to Barrower and to I.ender jointly. All ar any part af the insurance
<br />proceeds may be applied by I,cnd�r, at its option, either (a) to the reduction of the indebt�dness under the Note and
<br />this Security Instrument, first to any delinquent amounts applied in the order in paragraph 3, and t,hen tc� prepayment
<br />af principal, or (b) to the restoration c�r repair of the damaged Property. Any application of the procesds ta the
<br />principal shall not extend or postpone the du� dat� of [hs monthly payments which are referred to in paragraph 2, ar
<br />change the amount of such payments. Any �xcess insnrance praceeds over an amount required to pay all outstandinf3
<br />indebtedness under the Note and this Sec:urity Instrument shall be paid to the entity legally entitled theretc�.
<br />In the event of f�reclosure of this Security Instrument or other transf�r of title to the Property that extinguishes
<br />the indebt�dness, all right, title and interest of Barraw�r in and to insurance policies in force shall pass to the
<br />purchascr.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Barrower's Loan Application;
<br />Leaseholds. Borrower shall accupy, establish, and use the Property as Borrowsr's principal residence within sixty
<br />days after the execution of this Security Tnstrument (or within sixty days of a later sale ar transfer of the Property)
<br />and shall continue to �ccupy the Property as I3orrower's principal residence fc�r at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue hardship for Borrawer, ar unless extenuating
<br />circumstances �xist which are beyond Borrower's control. Borrower shall natify L.ender of any exkenuating
<br />circumstances. Barrawer shall not commit waste or destroy, damage or substantially change the Yroperty or allow the
<br />Praperty ta deteriorate, reasonable wear and tcar excepted. I.ender tnay inspect the Property if the Property is vacant
<br />ar abandoned or the loan is in default. Lender may take reasUnabls action to protect and preserve such vacant or
<br />���FR(NE) �asoil Pape 3 of B Ini[ials: ✓��
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