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� • <br />20110313� <br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the <br />ma�cimum amount that may be required for Barrower's escrow accouut under the Real Estate Settlement Procedures <br />Act of 1974, 12 U.S.C. Section 2601 ed 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 disbursements before the Bonower's payments are available in the account may not be based on <br />amounts due for the mortgage insurance premium. <br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender <br />shall ac�ount to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any <br />time are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Bonower to <br />make up the shortage as permitted by RESPA. <br />The Fscrow 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 insurance premium installment that Lender has <br />not bewme obligated to pay to the Secretary, and Lender shall prompfly refund any excess funds to Bonower. <br />Immediately prior to a foreclosure sale of the Property or its acquisition by I.ender, Borrower's account shall Ue <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 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, to any taees, special assessments, leasehold payments or gmund 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 khe Note; and <br />Fifth, 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 eltistence or subsequendy erected, against any hazards, casualties, and contingencies, including fire, for which <br />Lender requires insurance. Tfiis insurance shall be maintained in the amounts and for the periods that Lender <br />requires. Borrower shall also insure all improvements on the Property, whether now in e�stence or subsequently <br />erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies <br />approved hy 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, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not <br />made prompfly by Bonower. Each insurance company concerned is hereby authorized and directed to make payment <br />for such loss direcfly 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 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 amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding <br />indehtedness under the Note and this Security Instrument shall be paid to the entity legally entided thereto. <br />In the event of foreclosure of this Security Instrument or other transfer of title to the Properly that eJCtinguishes <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, Presereation, 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 continue 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 Bonower, or unless extenuating <br />circumstances exist which are beyond Bonower's control. Borrower shall notify Lender of any e2ctenuating <br />circumstances. Borrower shall not wmmit 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 reasonable action to protect and preserve such vacant or <br />III li!�IIIIIIIIIIIIII�IIlilllllll IIIIIIIIIIIIII Initlals: W n <br />VMPO-4N(NE) �oao�t.ai Page 3 of 8 �� <br />