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<br />Lender may, at auy time, collect and hold amounts for Escrow Items in an aggregate amaunt not to exceed the
<br />maximum amount that may be required for Borrawer's escrow accaunt under the Real Estate Settlement Pracedures
<br />Act of 1974, 12 U.S.C. Section 2601 et seq. and implemencing regulations, 24 CFR Part 3500, as they may be
<br />amended from tune to time ("RESPA"), except that Che cushion or areserve permitted by RESPA for unanticipated
<br />disbursernents or disbursements before the Borrower's payments are available in the account may not be based on
<br />amounts due for the mortgage insurance premium.
<br />If the arnounts held by Lender for Escrow Items exceed the amounts permitted 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 nat sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to
<br />make up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additional security far all sums secured by this Security Instrwnent. If
<br />Borrower tenders to Lender the full payment of a11 such sums, Borrower's accaunt shall be credited with the balance
<br />remaining for all installment items (a), (b), and (c) and any mortgage insurance premium installrnent that L,�nder has
<br />not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Borrower.
<br />Immediately priar to a foreclosure sale of the Property or its acquisition by L.endsr, Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Application of Pay�ents. All payments under paragraphs 1 and 2 shall be applied by I..,ender as follows:
<br />First, to the mortgage insurance premiunn 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, specia,l assessments, leasehold payrnents or ground rents, and fire, flood and ather hazard
<br />insurance premiums, as required;
<br />Third to interest due under the Note;
<br />Fourth, to annortization af the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. �Yre, Flood and Other Hazard Insurance. Borrower shall insure all improvennents on the Property, whether
<br />now in existence or subsequently erected, against any hazazds, casualties, and contingencies, including fire, far which
<br />Lender requires insurance. This insurance shall be rnaintained 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 I.ender. 1'he insurance policies and any renewals shall be held by I,ender and shall include loss payable
<br />clauses in favor of, and in a form acceptable to, L,ender.
<br />In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Barrower. 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 Lender jointly. All or any part of the insurance
<br />proceeds may be applied by I.ender, at its option, 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 prepayrnent
<br />of principal, or (b) to the restoration or repair of the damaged Property. Any application of the praceeds 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 insurazACe proceeds aver an arnount 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 che event of foxeclosure pf this Security Instrument or other transfer of title to the Property that extinguishes
<br />the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the
<br />purGhaser,
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Leaseholds. Bonower shall occupy, establish, and use the Property as Borz�ower'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 1'roperty as Borrower's principal residence for at least one year after the date of
<br />occupancy, unless Lender determines that requirernent will cause undue hazdship far Borrower, or unless extenuating
<br />circumstances exist which are be ond Bonower's cantral. Borrower shall noti I.ender of an extenuatin
<br />FHA Deed of Trust-NE �� ,/ "� , 4l96
<br />VMP � ( a VMP4RINE) (0809)
<br />Wolters Kluwer Flnancial Services �.� �� "�� Page 3 of 9
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