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<br />If the amaunts heid by L.ender for �scrow Ttems exceed the amounts permitted to be held by R�ST'A, T.ender
<br />shall acc:aunt to Borrower for the excess funds as required by R�SPA. If the amounts of funds held by Lendcr at any
<br />time are not sufficient to pay the Escrow It�ms whcn du�, Lender may notify the Borrower and re:quir� Barrawer tp
<br />make up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additi�nal s�curity far all sums secured by this Security Instrument. If
<br />Borrower tenders to Lender the full payment af all such sums, Borrower's account shall be credited wilh the balancc
<br />remaining for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has
<br />not become obligated to pay to the Secretary, and I,ender shall pramptly refund any excess funds to Borrower.
<br />Immediately prior to a foreclosure sale of ihe Prnp�rty ar its acqnisition by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installmenks for it�ms (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, Ca th� mortgage insurance premium to be paid by Lender to the Secretary or to the manChly charge by lhc
<br />SccrcLary inst�ad pf the monthly mortgage insurance premium;
<br />Second, ta any taxss, special assessments, leasehold payments or ground rents, and fire, tload and ather 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. Fire, Flood and Other Hazard Insurance. Borrower shall insure all impravemsnts on the Property, whether
<br />now in existence or subsequently erected, against any haGards, casualti�s, and cUntingencies, including fire, for which
<br />Lender requires insurance. This insurance shall be maintain�d in the amaunts and for the periods that Lender
<br />requires. Borrower shall also insur� all impravemsnts an the Property, whether now in existence or subsequently
<br />erected, against loss by floods to the extent re.quir�d by th� S�cretaty. All insurance shall be carried with companies
<br />approved by T,ender. The insuranc� pUlicies and any renewals shatl be held by Lender and shall include loss payable
<br />clauses in favor of, and in a form a�ceptahl� to, I,ender.
<br />Tn the event of loss, Borrawer shall give Lender immediate natice by mail. L.ender may make proof of loss if not
<br />made promptly by Borrower. Each insuaranc� campany concerned is hereby suthorized and directed to make payment
<br />for such loss directly to L�nder, in5tead af ta Barrower and ta L,ender jointly. All or any part of the insurance
<br />proceeds may be applied by I,�nder, aC its aption, either (a) ta th� reductian af the indebtedness under the Note and
<br />this Security Instrument, first ta any delinqu�nt amaunts applisd in th� arder in paragraph 3, and then to prepayment
<br />of principal, or (b) to th� r�s[vratian ar r�pair af the damaged Prap�rty. Any application of the proceeds to the
<br />principal shall not extend or pastpone the due date af the manthly payments which are referred to in paragraph 2, ar
<br />changc the amaunt of sucb payrnents. Any excess insuran�e proceeds over an amount required to pay all outstanding
<br />indebtedness under ihe Nate and this Security Instnxment shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosure of lhis Sccurity Instrumcnt or oth�r transfcr of titl� ta the Prc�perty Chat cxtinguishcs
<br />the indebtedness, all right, title and interest of Bonrower in and to insurancc policies in farc� shall pass tc� lhc
<br />purchaser.
<br />5, Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />Leaseholds, Borrower shall occupy, establish, and use the T'roperty as Borrower"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 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 T,ender determines that requirement will cause undue hardship for Borrawer, or unless extenuating
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any extenuating
<br />circumstanc�s. Borrawer shall nat commit waste or destray, daniaage ar substantially change the Prap�rty ar allow thc
<br />Property to dCteriorate, reasonable wear and tear excepted. I,�nd�r may inspect th� Praperky if th� Pro�erty is vacant
<br />or abandoned ar thc loan is in default. L,endsr may take r�asanable action to prntcct and preserve such vacant or
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