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<br />I,ender may, at any time, collect and hold amounts for �scrow Items in an aggregate amount nat ta excecd the
<br />maximum amount that may be required for Borrower's escrow account und�r the Real Estate Settlement Proc�dures
<br />Act of 1974, l2 U. S. C. Section 2601 et seq. and implernenting regulations, 24 CFR Part 3500, as thcy may be
<br />amended fram time to time ("R�SPA"), except that the cushion or reserve permitted hy RESPA for unaniicipated
<br />disbursements or disbursements before the Barrowcr's payments are available in the account may nat hc based on
<br />amounts due for the mortgage insurance premium.
<br />If the amounts held by Lender for Escrow Items excecd the amounts permitted to be held by R�SFA, Lender
<br />shall account to I3c�rrower far the excess funds as required by RESPA. Tf the amounts af funds held by i,ender at any
<br />time are not sufficient to pay the �scrow Items when due, L,ender may notify the Borrower and require Borrower ta
<br />make up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additional security for al] sums secured by this Security Instrument. If
<br />Borrower tenders to Lender the full payment of all such sums, Barrower's account shall be credited with the balance
<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 Lender shall promptly refund any excess funds to Borrower.
<br />Trnmediately prior ta a foreclosure sale of the Property or its acquisition by Lender, Borrower's accaunt shall be
<br />credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. All payments under paragraphs 1 and 2 shall be applied by Lender a.s fallows:
<br />First, to the mortgage insurance premium to be paid by Lendcr to the Secretary ar to thE rnonthly charge by the
<br />Secretary instead of the monthly mortgage insurance premium;
<br />5econd, to any taxes, special assessments, leasehold payments or ground rents, and �re, flaad and other hazard
<br />insurance premiums, as required;
<br />'T'hird, to intcrest due under the Note;
<br />Fourth, to amorcization af the principal of the Nate; and
<br />Fifth, to latc charges due undcr the Note.
<br />q. Fire, Flood and Other Hazard lnsurance. Borrower shall insure all improvernents on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and c�ntingencies, including tire, f'ar which
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. Sarrower shall also insure all improvements on the Property, whether now in existence or subsequently
<br />erected, against loss by floods to the ext�nt required by the Secretary. All insurance shall be carried with companies
<br />approved by T,ender. 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 ta, Lendcr.
<br />ln the event of loss, Barrower shall give [,ender immediate notice by mail, Lender may make praof of loss if not
<br />made promptly by Borrower, Each insurance company concerned is hereby authorized and directed to make payment
<br />for such ]oss directly to Lender, instead of to Borrower and to Lender jointly. All nr any part af the insurance
<br />proceeds may be applied by [.ender, at its option, either (a) to tha reductian of the indebtedness under the Note and
<br />this Security Instrument, first to any delinquent arnounts applied in the order in parag,raph 3, and then to prepayment
<br />af principal, or (b) to the restoratian ar repair of the damaged Property. Any application of the proceeds ta the
<br />principal shall not extend or postpane the due datc of the monthly payments which are referred to in paragraph Z, ar
<br />change the amount of such payments. Any excess insurance proceeds aver an amount required to pay all outstanding
<br />indebtedness under the Note and this Security Instrument shall be paid to the cntity legally entitled thereto.
<br />In the eveni of foreclosure of chis Security Instrument or other transfer af title to the Properry that extinguishes
<br />the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to th�
<br />purchaser.
<br />5. Occupancy, Preservation, Maintenance and Pratection of the Aroperty; Borrower's Loan Applicatian;
<br />Leaseholds. Borrower shall occupy, establish, and use the Property as Borrawer'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 Praperry)
<br />and shall continue to occupy thc Property as Barrower' s principal residence for at least one year after thc date of
<br />occupancy, unless Lender determines that requirement will cause undue hardship for Borrower, or unless extenuating
<br />circumstances exist which are beyond Borrawer's control. Borrower shall notify [.ender of any extenuating
<br />circumstances. Borrower shall nat commit waste or destroy, damage or substantially ahange the Property or allow the
<br />Property to deteriorate, reasonable wear and tear excepted. Lender may inspect the Praperty if the Froperty is vacant
<br />ar abandoned or the loan is in default. Lender may take reasonable action to pratect and preserve such vacant or
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