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<br />If lhe arr���unts held by Lender lor F'scrc>w Items excee�l the amounts permitled lo be held by RESPA, Lendcr
<br />tihall account tn Borrower fi�r ihe excess fi�nds as requircd hy RESPA_ If the amounts of funds hul�l by Lender at any
<br />titne are not sullicient to pay the Escrow Items when due, Lender may notiFy the Borrower and require Borrower tn
<br />make up the shortage as permiited by RF.SPA.
<br />The I;scrow l�ur�ds are pledged as additional security for all sums secured by tf�is Secutity Instnunent. If
<br />Borrower tenders to I,ender the lull paytnent of all tiuch sums, Borri�wer's account shall be crediied with thc balance
<br />remaining For all installment itcros (a), (b), and (c) and uny mortgage insurancc premium installment tbat Lender has
<br />not become obligate�l t�> pay to the Secretary, az�d Lender Sha11 promptly refund any excess hmds to Sorrower.
<br />Iin►nediately prior to a foreclosure tiale of the Ptvperty or its acyuisition by Lender, Borrower's acc�unt shall bc
<br />credited wilh any balance remaining 1'or all installments f�r items (a), (b), and (c).
<br />3. Applieation uf Payments. All payments under paragraphs 1 and 2 shull be applied hy Lender as follows'
<br />Fir�t, to the inortgage insurancc premiuin to hc paid by Lcnder ta 1he Secretary nr tu the monthly charge by the
<br />Secretary instead of thc mi�nthly inortgage insurance premi�un;
<br />Scci�nd, lo any taxes, special assessments, leatiehuld paymcntti ot ground rents, and lire, llood and other hazard
<br />inaurance prcmiuins, a� rcquired;
<br />1'hird, t<� interest due under the Nnte;
<br />Fourth, to arnortization of the priqcipal ol'the Note; and
<br />Fiith, to late charges due under thc Ne�te.
<br />4. Fire, Flood and Other Hazard Insuranee. [3��rrower shall insute all iinprovernents on the Property, whel.her
<br />now in existence or sub�cquenily erected, againsC any hazatds, casualties, and contingencies, includine firc, fi�r which
<br />Lender requires insurance. This intiur`ance shall b� inaintained in the amounts and for the periods thai Lender
<br />requires. Borrower shaJl also insure all improvemcntn on the Prnperty, whether now in exislence or subsequenily
<br />etected, a�uinst losti hy floods to the extent requirea by the Sceretary. All insurance shall be carricd with companies
<br />apptoved by Lender. The insutance policies and any renewals shall be held by Lender and shall include losti payable
<br />clau�es in favc�t of; and in a I'onn ace�rtable to, Lender.
<br />In the evenl of loss, Bortower shall give Lender immediate n��tice by inail_ Lender muy lnake proof of loss if not
<br />rnade promptly hy $orrower_ Each insurance company concerned is hereby authorized and directed to make payment.
<br />fe�r such lnss ditectly to Lender, instca�l oP to Bnrrowet und to Lender jointly. All or any part of the intiutance
<br />procceds may he applied by Lender, at its option, either (a) tu ihe reduction of the indebtedneas under the Nnte and
<br />this Security In�iruinent, first to any dclir�quent ainountti applied in the otder in paragraph 3, and then to prepayment
<br />of principal, or (h) to the resturation or repair of thc damaged Pr�perty. �.ny applicatian of Lhe pmcccds to the
<br />principal shall not. extcnd i�r post.ponc the due date of the monthly payments which arc referred to in paragraph 2, ot
<br />change the amounl of such payments_ Any excess insurance procecds over an amount requirecl to pay all outstanding
<br />indebtednesti uncler the Note and lhis Security Instniment shall be paid to i.he entity lcgally entitled thercto_
<br />In the event of foreclosure of thiy Security Insttu�nent or olher transfer af tille to the Prnperty that extinguishee
<br />the indebieclness, all right, titic and interest of Bortower in and to insirrance policies in force �hall pass to the
<br />purchaset.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Lnrn Application;
<br />I.,easehulds. Borrower tihall occupy, etitablish, an�l use the Property as $orrower's principal residence wilhin sixty
<br />cfays after the execution of this Security Inslrument (or within sixty days of a later sale or transfcr of the Property)
<br />and shall coniinue to occupy lhe Properiy as Borrower's principal retiidence for at leatii one year after the [late of
<br />occupancy, unless Lcnder deiennincG that requirernent will cause undue hardship for Borrower, or unlesa exlenuating
<br />circuinstattces exist which are beyona Borrower's control_ Borrower shall notify Lender of any extenuating
<br />citcum�tancey. $orr��wet shall not c��mmit waste or de5lroy, damage or substantially change the Propetty ot allow thc
<br />Property to deteriorate, reasonahle wear and tcar excepted_ Lendet may inspect the Ptoperty if the Propetty is vacant
<br />or abandoned or the loan is in default. Lender muy takc reasonable acti��n io prolect and preserve such vacant or
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