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<br />Lender rnay, at any tirne, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the
<br />maximurn amount that may be required for Banower's escrow account under the Real Estate Settlernent Procedures
<br />Act of 1974, 12 U.S.C. 5ectian 2d01 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 permitted by RESPA for unanticipated
<br />disbursements 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 amounts held by L,Qnder for Escrow Items exceed the amounts permitted to be held by RESPA, Lender
<br />shall account to Bprrower for the excess funds as required by R�SPA. If the amounts af funds held by L.ender at any
<br />time are not sufficient to pay the Escraw Items when due, L.Ender may notify the Barrower and require Borrower to
<br />make up the shortage as permitted by RE3PA.
<br />The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If
<br />Borrower tenders to L,�nder the full payment of all such sums, Borrower's account shall be credited with the balance
<br />remaining for all installrnent items (a), (b), and (c) and any mortgage insurance premium installrnent 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 foreclosure sale of the Property or its acquisitian by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installznenCs 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 Lender to the Secretary or to the rnonthly charge by the
<br />Secretary instead of the monthly mortgage insurance prernium;
<br />Second, to any taxes, special assessments, leasehold paynnents or ground rents, and �re, flood and other 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 improvements on the Praperty, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including �re, for which
<br />Lender 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 palicies and any renewals shall be held by Lender and shall include loss payabie
<br />clauses in favor of, and in a form acceptable ta, L.ender.
<br />In the event of loss, $orrower shall give Lender immediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment
<br />far such loss directly to L.�nder, instead of to Borrower and to Lender joinCly. All or any part of the insurance
<br />proceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and
<br />this Security Instrurnent, first to any delinquent arnounts applied in the order in paragraph 3, and then to prepayment
<br />of principal, or (b) tp the restoratian or rep�ir of the damaged Praperty. Any application of the proceeds to the
<br />principal shall nat extend or postpone the due datc af the monthly payments which are referred to in paragraph 2, or
<br />change the amount 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 entitled thereto.
<br />In the event of foreclosure of this Security Instrurnent 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 />purchaser.
<br />5. Occupancy, Preservation, Maintenance and Protection of the Property; Borro�ver's Loan Application;
<br />Leaseholds. Borrower shall occupy, establish, and use the Praperty as Borrower's principal residence within sixty
<br />days after the executian of this Security Instrument (or within sixty days of a later sale ar 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 />accupancy, unless I.ender determines that requirement will cause undue hardship for Borrower, or unless extenuating
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any _ extenuatin
<br />FHA Deed of Trust-NE
<br />VMP �
<br />Wolters Kluwer Pinancial Servfces
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<br />a/96
<br />VMP4RINE) (0809)
<br />Paga 3 ot 9
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