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<br />If the amounts held by Lender far Escrow Iterns exceed the amounts permitted to bc h�ld by R�SPA, L,ender
<br />shall account to Borrower fUr the excess funds as required by RESPA. If the amounts of 1'unds h�ld by Lender at any
<br />time are not sufficient to �ay the �s�.r�w Items when due, Lender may notify the Borrower and r�quirt; Bc�rrr�wCr ta
<br />make up the shartag� as permitted by RE5PA.
<br />Thc �scrpw Funds are pledged as additional security for all sums sccured by this Security Instn►ment. If
<br />Borrawer tenders to Lender the full payment of all such sums, Barrawer's account shall be credited with the balance
<br />rernaining for all installment items (a), (b), and (c) and any martgage insurance premium installment that Lender has
<br />nat became obligated to pay to the Secretary, and Lender shall prc�mptly refund any excess funds to }3orrower.
<br />Immediately prior to a foreclosure sale of the Prop�rty ar its aaquisitian by Lender, Borrower's account shall be
<br />cr�dit�d with any balance remaining for all installments for items (a), (b), and (c).
<br />3, Application of Payments. All paym�nts r�nder paragraphs 1 and 2 shall be applied by Lender as follows:
<br />First, to the mortgage insurance premium to be paid by I.end�r tU the Secretary or to the monthly charge by the
<br />5ecretary instead of the monthly mc�rtgage insurance premiu�m;
<br />Second, to any taxes, sp�cial assessrnents, leasehold payrnents or ground rents, and fire, flood and other hazard
<br />insurance premiums, as rcquired;
<br />Third, to interest due under the Note;
<br />Fc�urth, ta amartization of the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. �'ire, Flood and Other Hazard Insurance. Borrower shall insure all imprpveznc:nts an the Property, whether
<br />n�w in existence ar subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />I.,r:ndcr requires insurance. lfiis insurance shall be maintained in the amounts and for the periods lhat Lendcr
<br />requires. Borrow�r shall also insure all improvements on the Property, whether now in existence or subsequently
<br />CICGf�(� 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 th� �vent of loss, Borrower shall give L.ender immediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Borrower. Each insurance company concerned is hereby authorizc.d and dirc:cted to make payment
<br />for such loss directly to T.ender, instead of to Borrower and to T.ender jointly. All ar any part of the insurance
<br />proceeds may be applied by Lender, at its option, eithcr (a) to the rcduction of th� indebtedness under the Nc�t� and
<br />this Security Tnstrument, first ta any dclinqusnt amaunts applied in th� order in paragraph 3, and then tp pr�paym�nt
<br />of principal, or (b) to the restoration or repair of khe damaged Property. Any applicatian Uf th� prncceds to the
<br />principal shall not extend or pnstpc�ne th� due dat� of th� mc�nthly payments which are referred to in paragraph 2, or
<br />change the amount of such payments. Any excess insurance procc�:ds �ver an amaunt arequired to pay all c�utslanding
<br />indebtedness under the Not� and tkais Security Instruraent shall be paid to ths entity legally entitled thereta.
<br />In the event of foreclosure of this Security Tnstrument or other transfer of title to the Property that extinguishes
<br />the indebtedness, all right, title and intert;sl of Borrower in and to insurancc policies in f�rce shall pass to the
<br />purchaser.
<br />5, Oc�upancy, Preservation, Maintenance and Protection oF the Property; Borrower's Loan Application;
<br />Leaseholds, I3orrower shall occupy, establish, and use the Property as �3orrower's principal residence within sixty
<br />days after the execution of this Security Tnstrument (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 L.ender determines that requirement will cause undue hardship for 13orrower, or unless extenuating
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify I.ender of any extenuating
<br />circumstances. Borrower shall nak cammit waste ar destroy damage or substantially change lhe Property or allow the
<br />Properly to det�riorate, reasanable w�ar and k�ar cxcepted. Lcnder may inspect the Property if the 1'roperty is vacant
<br />Ur abandc�ned ar th� laan is in defaull. Ixnder may Cake reasonable action to protect and preserve such vacant or
<br />�-�4RINE) �aeo, � Paqe 3 af 8 Initials:�T
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