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<br />Lender may, at any time, collect and hold arnounts for Escrow Iterns in an aggregate amount not to exceed lht
<br />maximum amount that may bc required for Borrower's escrow account under the Real Estate Settlement Procedures
<br />Act of 1974, 12 CJ.S.C. Section 26p1 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 disbursemcnts before the Borrower's payments are available in the account may not he based on
<br />amounts duc for the mortgage insurance premium.
<br />If the amoun�s held by Lender for Escrow Items exceed the amounts permitted to be held by CtESPA, Lender
<br />shall account to Borrower for the excess funds as reyuired by RESPA. If the amounts of funds held by Lencler at any
<br />time are not sufficient to pay the �scrow Items when due, I�ender may notify the $orrower and require Borrower to
<br />make up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additional security for all sums secured by this Security Instrurnent. If
<br />Borrower tendcrs lo Lender the full payment of all such sums, Borrower's account shall be credited with the balance
<br />remaining tbr all installment items (a), (b), and (c) and any mortgage insurance prerniurn installment that Lender has
<br />not become obligated to pay to the Secr�tary, and Lender shall promptly refund any excess funds to Borrower.
<br />Immediately prior to a foredosure sale of the Property or its acquisition by Lender, $orrow�r's account 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 as follows:
<br />First, to the mortga�c insurance premium to be paid by Lender to the Secretary or to the monthly char�e 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. �'ire, Flood and Otk�er Hazard �nsurance. Borrower shall insure all improvements on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualtics, and contingencies, including fire, for which
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />rcyuires. Borrower shall also insure all improvements on the Property, whether now in existence or suhsequently
<br />erected, against loss by t7oods to the extent reyuired by the Secrecary. All insurance shall be carried wilh companics
<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 the event of loss, �3orrower shall give Lend�r 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 />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 ot' the indebtedness under the Note and
<br />this Security Instrument, tirst to any delinquent amounts applied in the order in paragraph 3, and then to prepayment
<br />of principal, or (b) to the restoration or repair of the damaged Prope�rry. Any application of the proceeds to the
<br />principal shall not extend or postpone the due date of the monthly paymcnts 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 />ln the event of foreclosure of this Security Instrument 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; 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 of a later sale or transfer of the Property)
<br />and shall cnntinue to occupy the Property as Borrower's principal residence for at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue hardship for Borrower, or unless extenuatin�
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any extenuating
<br />circumstances. Borrower shall not commit waste or destroy, damage or substantially change the Property or allow the
<br />Property to deteriorate, reasonable wear and tear excepted. Lender may inspect the Property if the Property is vacant.
<br />or abandoned or the loan is in default. Lender may take r�asonable action to protect and preserve such vacant or
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