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<br />Lender may, at any time, collect and hold amounts for Escrow Ttems in an aggregate amount not to exceed the
<br />maximum amount that may be required for Borrower' s escraw account under the Real Estate Settlement Pracedures
<br />Act of 1974, 12 U. S. C. Section 2601 et seq, and implementing regulations, 24 CFR Part 3500, as they may be
<br />amended from time to time ("RESPA"), except that the cushion or reserve pernutted by RESPA far unanticipated
<br />disbursements or disbursements before the Borrower's payments are available in the account may nat be basad on
<br />amounts due for the martgage insurance premium.
<br />If the amounts held by Lender for Escrow Items exceed the amounts 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 are not suf�cient to pay the Escrow Items when due, Lender may notify the 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 suxns secured by this Security Instrument. If
<br />Borrower tenders to 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 martgage 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 prior to a fore�losure sale of the Property or its acquisition by Lender, Borrower's account shall be
<br />credited with any balance rernaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. All payments under pazagraphs 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 premiuxn;
<br />Second, to any taxes, special assessments, leaschnld payments or ground rents, and frre, flood and other hazard
<br />insurance premiums, as required;
<br />Third, to intcrest due wnder the Note;
<br />Fourth, to amortization of the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. FYre, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, far which
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. Barrawer shall also insuxe all improvements ot� 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 />approved by Lender. The insurance policies and any renewals sha11 be held by Lender and shall include loss payable
<br />clauses in favar af and in a form acceptable to, Lender.
<br />In the event of loss, Borrower shall give Lender imumediate notice by mail. Lender xnay make proof of lass 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 I.ender jointly. All or any part of the insurance
<br />proceeds may be applied by Lender, at its opCion, 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 restoration or repair of the damaged Property. Any application of the proceeds to the
<br />princ�pal 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 praceeds over an amount required to pay all outstanding
<br />indebtedness under the Note a�nd this Security Insmiment shall be paid to the entity legally entitled thereto.
<br />In the event of foreclaswe of this Security Instrument or other transfer of title to the Property that extinguishes
<br />the indebtedness, all right, ticle and interest of Borrower in and to insurance policies in force shall pass to the
<br />purchaser.
<br />5. Occupancy, PreservatYon, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Leaseholds. Borrawer shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the execution of this Security Instrument (or within sixty days of a later sale ar transfer of the Property)
<br />and shall continue to nccupy the Property as Borrawer' s principal residence for at least one year after the date of
<br />occupancy, unless Lender deterrnines that requirement will cause undue hardship far Borrower, or unless extennating
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify T,ender of any extenuating
<br />circumstances. Borrawer shall not commit waste or destroy, damage or substantially change the Property or a11ow 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 Cake reasonable action to protect and preserve such vacant or
<br />8800906010 �906010
<br />Initials.
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