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<br />and sell the Property; and to take any action required of Lendcr including, but not {imited to, releasing or canceiing
<br />this Security Instrument.
<br />BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby wnveyed and has the right to
<br />grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower
<br />warrants and wil] defend generally the title to the Properry against ail claims and demands, subject to any
<br />encumbrances of record.
<br />THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with
<br />limited variations by jurisdiction to constitute a uniform sccurity instrument covering real property.
<br />UNIFORM COVENANTS. Borrower and Lender covenant and agrce as follows:
<br />1. Payment of Principal, Interest and Late Charge. Borrower shall pay when due the principal of, and
<br />interest on, the debt evidenced by the Note and late charges due undcr the Note.
<br />2. Monthly Payment of Taxes, Insurance, and Other Charges. Borrower shall include in each monthly
<br />payment, together with the principal and interest as set forth in the Note and any late charges, a sum for (a) taxes and
<br />special assessments levied or to be levied against thc Property, (b) leasehold payments or ground rents on the
<br />Property, and (c) premiums for insurance requircd under paragraph 4. In any year in which the Lender must pay a
<br />mortgage insurance premium to the Secretary of Housing and Urban Developmcnt ("Secretary"), or in any year in
<br />which such premium would have been required if Lender still held the Security Instrument, each monthly payment
<br />shall also include either: (i) a sum for the annual mortgage insurancc premium to be paid by Lender to the Secretary,
<br />or (ii) a monthly charge instead of a mortgage insurance premium if this Security Instrument is held by the Secretary,
<br />in a reasonable amount to be determined by the Secretary. Except for the monthly charge by the Secretary, these items
<br />are called "Escrow Items" and the sums paid to Lender are called "Escrow Funds."
<br />Lender may, at any time, collect and hold amounts for Escrow Itcros in an aggregate amount not to exceed the
<br />maximum amount that may be required for Borrower' s escrow account under the Real Estate Settlement Procedures
<br />Act of 1974, 12 U.S.C. §2601 et sea. and implementing regulations, 24 CFR Part 3500, as they may be amended
<br />from time to lime ("RESPA"), except that the cushion or reserve permitted by RESPA for unanticipated disbursements
<br />or disbursements before the Borrower's payments are available in the account may not be based on amounts due for
<br />the mortgage insurance premium.
<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender shall
<br />account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any time
<br />are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to make
<br />up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. 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 insurancc premium installment that Lender has
<br />not become obligated to pay to the Secrctary, a�d Lender shall promptly refund any excess funds to Borrower.
<br />Immediately prior to a foreclosure sale of the Property or its acquisition by Lcnder, Borrower's account shall be
<br />credited with any bala�ce remaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. All paymenis under paragraphs t and 2 shall be apptied by Lender as follows:
<br />FIRST, to the mortgage insurance premium ro be paid by Lendcr to thc Secretary or to the monthly charge by
<br />the Secretary instead of thc 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 thc principal of the Notc; and
<br />FIFTH, to late charges due under the Note.
<br />4. Fire, F3ood and Other Hazard insurance. Borrower shall insure all improvements on the Property,
<br />whether now in existence or subsequenNy erectcd, against any hazards, casualties, and contingencies, including fire,
<br />for which Lender requires insurance. This insurance shall bc maintained in thc amounts and for the periods that
<br />Lender requires. Borrower shall also insure all improvemcnts on the Property, whether now in existence or
<br />subsequendy erected, against loss by floods to the extcnt required by the Secretary. All insurancc shall be carried with
<br />companies approved by Lender. The insurance policies and any rcnewals shall bc hcld by Lender and shall include
<br />loss payable clauses in favor of, and in a form acceptable to, Lendcr.
<br />In the event of loss, Borrower shall give Lender immedia[e notice by maiL Lcnder may makc proof of loss if not
<br />made promptly by Borrower. Each insurancc company concerned is hercby authorizcd and directed to make payment
<br />for such loss directly to Lender, instead of to Borrower and to Lcnder jointly. All or any part of the insurance
<br />proceeds may be applied by Lender, at its option, either (a) to thc rcduction of thc indebtedness undcr thc Note and
<br />this Security Instrument, first to any delinqucnt amounts applicd in the ordcr in paragraph 3, and then to prepayment
<br />of principal, or (b) to the restoration or repair of thc damagcd Property. Any application of the proceeds to the
<br />principal shall not cxtend or postpone thc duc datc of thc monthly payments which arc refcrred to in paragraph 2, or
<br />change the amount of such paymcnts. Any cxcess insurance proceeds over an amount required to pay a11 outstanding
<br />indebtedness under the Note and this Security Instrument shall be paid to thc entity Icgally entidcd thereto.
<br />In the event of foreciosure of this Security Instrumcnt or other transfer of tide ro the Property that extinguishes the
<br />indebtedness, all right, title and interest of Borrowcr in and to insurance poticics in force shall pass to the 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 Borrowcr's principa] residencc within sixty
<br />days after the execution of this Security lnstrument (or within sixty days of a Iatcr sale or transfcr of the Property)
<br />FHA NEBR4SKA DEED OF TRUST - MERS DocMagic �''x�n� aoo-stsassz
<br />NEDOTZ.FHA 11/01/08 Page 2 of 7 www.docmagic.com
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