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20�101573
<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender
<br />shall account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lcnder at any
<br />time are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower 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 Instrument. If
<br />Borrower lenders to Lender the full Paymenl of all such sums, Borrower's accounl shall be crediteJ with lhe balance
<br />remaining for all installment items (a), (b), and (c) and any mortgage insurauce premium installment that Lender has
<br />not become obligated to pay to the Secretary, and Lender shall promptiy refund any excess funds to Borrower.
<br />Immediately priar to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. Ali payments undcr paragraphs 1 and 2 shall bc applicd by Lcndcr as follows:
<br />First, to the mortgage insurance premium 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, ta 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 ainortization of the principal of the Note; and
<br />Pifth, to late charges due under the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether
<br />now in existence or subsequently crected, against any hazards, casualtics, and contingcncies, including ftre, for which
<br />Lender requires insurance_ This insurance shall be maintained in the amounts 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 Lender. The insurdnce policies and any renewals shall be held by Lender and tihall include loss payable
<br />clauses in favor of, and in a form acceptable to, Lender_
<br />In the event of loss, Borrower shall give Lender iinmediate notice by inail. Lender may inake 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 Bonower and to Lender jointly. All or any part of the insurance
<br />procecds may bc applied by Lender, at its option, either (a) to thc rcduction of the indebtedncss under the Note and
<br />this Security Instrument, first 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 Property_ Any application of the proceeds to the
<br />principal shall not extend or postpone the due date of the monthly payments which are referred to in paragraph 2, or
<br />change the amounl of such paymenls_ Any excesti innurdnce proceedti over an amounl required to pay ull oulslanding
<br />indebtedness under the Note and this Security Instnunent shall be paid to the entity legally entitled thereto.
<br />In thc cvent of foreelosure of this Sccurity Instrumcnt or other transfcr of title to thc Property that extinguishcs
<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 Applicafion;
<br />Leaseholds. Borrowcr shall occupy, establish, and usc thc Property as Borrowcr's principal residcncc 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 continue to occupy the Property as Bonower's principal residence for at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cau�e undue hardship for Borrower, or unless exlenuating
<br />circumstances exist which are beyond Borrower's control. Barrower shall notify Lender of any extenuating
<br />circmnstances. Borrower shall not cominit waste ar destroy, dainage 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 reasonable action to protect and preserve such vacant or
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<br />Initiala!s�
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