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20100814�
<br />T,ender may, at any time, collect and hold amounts for �scrow Items in an aggregate amount not to exceed the
<br />maximum amount that may 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 regulations, 24 CFR Part 3500, as they may be
<br />amended from time to tinne ("RESPA"), except that the cushian or reserve permitted by RESPA for unanticipated
<br />disbursements or disbursements before the Borrower's payments are available in khe account may nat be based on
<br />amounts due for the morigage insurance premium.
<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender
<br />shall acc�unt to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any
<br />time are nat sufficient to pay the Escrow Items when due, I�ender may notify the Borrower and require Borrower to
<br />make up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additianal security far all sums secured by this Security Instrument. If
<br />Borrpwer tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance
<br />remaining for all installment iterns (a), (b), and (c) and any mortgage insurance premium installment that Lender has
<br />not become obligated to pay to the 5ecretary, and I�ender shall promptly refund any excess funds to Sorrawer.
<br />Immediately prior to a foreclosure sale of the Property or its ac uisition by l.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 Lender as follows:
<br />First, to the mortgage insurance premium to be paid by I.,ender to the 5ecretary or ro 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, fload and other hazard
<br />insurance premiums, as required;
<br />'T'hird, to interest due under the Note;
<br />Faurth, to amortization of the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. Fire, Flood and Othvr Hazard Tnsuranco. Borrnwer shall insure all irnprovements on the Property, whether
<br />naw in existence or subsequently erected, against any hazards, casualHes, and contingencies, including fire, For which
<br />I.ender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. Borrower 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 />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. Lender may make proof of loss if not
<br />made pronnptly by Borrower. Each insurance company cancerned is hereby authorized and directed to make payment
<br />for such lass directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance
<br />proceeds rnay be applied by Lender, 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) ko the restoration or repair of the damaged Property. Any application af the praceeds to the
<br />principal shall not extend or postpone the due date of the mvnthly payments which are referred to in paragraph 2, or
<br />change the amnunt 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 entided thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer af title to the Property that extinguishes
<br />the indebtedness, all right, title and interest of Borrawer in and to insurance policies in farce shall pass to the
<br />purchaser.
<br />5. Oocupancy, Prasorvation, Maintenance and Protection of the Property; Horrower's Loan Application;
<br />Leasehalds. Borrower shall occupy, establish, and use the Property as Barrower'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 Praperty)
<br />and shall continue to occupy the Property as Borrawer's principal residence for at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue hardship for Sarrower, or unless extenuating
<br />circumstances exist which are heyvnd Borrower's control. Borrower shall notify Lender of any extenuating
<br />circumstances. Borrower shall not corntnit 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. I,ender may take reasonable action to protect and preserve such vacant or
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