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241008047
<br />Lender may, at any time, collecC and hold amounts for Escrow Items in an aggregate amount not to exceed the
<br />maxirnum amount that may be required for Borrower's escraw 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 350�, as they may be
<br />amended from time to time ("RESPA"), except that the cushion or reserve pernutted 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 premiurn.
<br />If the amounts held by Lender for Escrow Items exceed the arnounts pernutted 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 Lender at any
<br />time aze not sufficient ta pay the Escrow Items when due, L.ender may notify the Boarrower and require Borrower to
<br />make up the shortage as pemuttetl by RESPA.
<br />The Escrow k�nds 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 sucns, Borrower's account shall be credited with the balance
<br />remaining for all installrnent items (a), (b), and (c) and any rnartgage insurance premium installment that L,�nder has
<br />not become obligated to pay to the Secretary, and Lender shall prornptly refund any excess funds to Borrower.
<br />Immediately prior to a foreclosure sale of the Property or its acquisition by I.exider, Bonower'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 Lcnder as follaws:
<br />First, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly chazge by the
<br />Secretary instead of the monthly moRgage insurance premium;
<br />Second, to any taxes, special assessments, leasehold payments or ground rents, and fre, �Xood and other hazard
<br />insurance premiums, as required;
<br />Third 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. �re, Flood and Other Hazard Insurance. Borrower shall insure all impravements on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including flre, for which
<br />Lender requires insurance. This insurance shall be maintained in the arnounts and for the pe�iods that Lender
<br />requires. Borrower shall alsa insure all irnprovernents on the Property, whether now in existence or subsequently
<br />ereeted, against loss by floods to th� 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. I.ender may make proof of loss if not
<br />made promptly by Borrower. Each insurance company conceme�i is hereby authorized and directed ta make payment
<br />for such loss direccly to Lender, instead of to Borrower and to L.ender jointly. All or any part of the insurance
<br />procceds may be applied by I.ender, at its aption, either (a) to the reduction af the indebtedness under the Note and
<br />this Security Instrurnent, �rst to any delinquent amaunts applied in the order in paragraph 3, and then to prepayrnent
<br />of principal, or (b) to the restoration or repair of the darnaged Property. Any applicatian 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 amount of such payments. Any excess insurance proceeds over an annount required to pay all outstanding
<br />indebtedness under the Note and this Se�urity Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosure of this Se�urity Instrurnent or other transfer of title to the Froperty that extinguishes
<br />the indebtedness, all right, title and interest af Borrower in and to insurance palicies in force shall pass to the
<br />purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Praperty; Borrower's Loan Application;
<br />Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the execution of this Security Instrurnent (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 Lender deternunes that requirement will cause undue hardship for Bonower, or unless extenuating
<br />circumstances exist which are be ond Borrower's control. Borrovcrer shall noti I.ender of an extenuatin
<br />FHA Deed af Trust-NE � 4/96
<br />VMP � VMP4RME) 10809)
<br />Wolters Kluwer Flnanclal Services Page 3 of 9
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