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<br />Lender rnay, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the
<br />ma7cimurn amount that may be required for Borrower's escrow account under the Real Estate SetClement Procedures
<br />Act of 1974, 12 U.S.C. Section 2d01 et seq. and implementing regulations, 24 CFR Part 3500, as they may be
<br />amended from time Co 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 npt be based on
<br />amounts due for the mortgage insurance premium.
<br />If the amounts held by Lender for Escrow Items exceed the arnounts permitted to be held by RESPA, Lender
<br />shall account to Borrower for the excess funds as required by RESPA. If the arnounts of funds held by T ender at any
<br />tirne are not sufficient to pay the Escrow Iterns when due, Lender may notify the Borrower and require Borrower to
<br />make up the shortage as permitted by R�SI'A.
<br />The Escrow Funds are pledged as additional security for all sums secnrsd by this Security Tnstrument. If
<br />Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance
<br />remaining for all installment 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 acquisition by L.cnder, Barrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Application af Payments. All payments under paragraphs 1 and 2 shall be applied by Lender as follows:
<br />First, to the mortgage insurance prerniurn 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, special assessments, leasehold payments or ground rents, and fire, 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 irnprovements on the Property, whether
<br />now in existence or subsequently erected, against any hazazds, casualties, and contingencies, including fire, for which
<br />Lender requires insurance. This insurance shall be maintained in the announts and far 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 palicies and any renewals shall be held by Lender and shall include loss payable
<br />clauses in favor of, and in a fprm acceptabls to, Lender,
<br />In the event of loss, Borrower shall give I.ender immediate notice by mail. I.ender may make proof of lass if not
<br />made promptly by Borrower. 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 Lender, at its option, either (a) to the reduction of the indebtedness under the Note and
<br />this Security Instnunent, �rst to any delinquent amounts applied in the order in paragraph 3, and then to prepayrnent
<br />of principal, or (b) to the restoration ar repair of the damaged Praperty, Any application of the proceeds to the
<br />principal shall not extend or postpone the due date 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 a,ll 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 Instrument or other transfer of title to the Property that extinguishes
<br />the indebtedness, a11 right, title and interest of Bonower in and to insurance policies in force shall pass to the
<br />purchaser.
<br />S. Occupancy, Preservation, Maintenance and Protectian af the Property; Borrower's Loan Application;
<br />Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the execution of this Security Instrument (or within sixty days af 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 Lender deter►nines that requirement will cause undue hardship for Borrower, or unless extenuating
<br />circuunstances exist which are be ond Borrower's control. Borrower shall noti Lender of an extenuatin
<br />FHA Daed of Trust-NE 4/9fi
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