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201104016
<br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the
<br />cimum amount that may be required for Borrower°s escrow account under the Real Estate 5ettlement Procedures
<br />of 1974, 12 U.S.C. Section 2601 et seq. and implementing regulations, 24 CFR Part 3500, as they may be
<br />;nded from time to time ("RESPA"), except that the cushion or reserve permitted by RESPA for unanticipated
<br />�ursements or disbursements before the Borrower's payments are available in the account may not be based on
<br />�unts 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 />ll account to Bonower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any
<br />e are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to
<br />ce 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 />rower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance
<br />iaining for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has
<br />become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Bonower.
<br />nediately prior to a foreclosure sale of the Property or its acquisirion by Lender, Borrower's account shall be
<br />iited 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 I.ender to the Secretary or to the monthly chazge by the
<br />retary 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 />uance premiums, as required;
<br />Third, to interest due under the Note;
<br />Fourth, to amortizarion of the principal of the Note; and
<br />Fifth, to late chazges due under the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Bonower shall insure all improvements on the Property, whether
<br />v in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />ider requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />uires. Borrower shall also insure all improvements on the Property, whether now in existence or subsequently
<br />;ted, against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies
<br />roved by Lender. The insurance policies and any renewals shall he held by Lender and shall include loss payable
<br />�ses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Bonower shall give Lender immediate norice by mail. Lender may make proof of loss if not
<br />ie promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment
<br />such loss directly to Lender, instead of to Bonower and to Lender jointly. All or any part of the insurance
<br />ceeds may be applied by Lender, at its option, either (a) to the reduction of the indebtedness under the Note and
<br />Security Instrument, first to any delinquent amounts applied in the order in paragraph 3, and then to prepayment
<br />principal, or (b) to the restorarion or repair of the damaged Property. Any application of the proceeds to the
<br />icipal sha11 not extend or postpone the due date of the monthly payments which are referred to in pazagraph 2, or
<br />nge the amount of such payments. Any excess insurance proceeds over an amount required to pay all outstanding
<br />�btedness under the Note and this Security Instrument sha11 be paid to the enrity legally entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer of title to the Properly that extinguishes
<br />indebtedness, all right, title and interest of Bonower in and to insurance policies in force shall pass to the
<br />v 5. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />�seholds. Bonower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />s after the execution of this 5ecurity Instrument (or within sixty days of a later sale or transfer of the Property)
<br />shall continue to occupy the Property as Borrower's principal residence for at least one yeaz after the date of
<br />upancy, unless Lender determines that requirement will cause undue hardship for Bonower, or unless extenuating
<br />umstances e�cist which are bevond Borrower's control. Bonower shall notifv Lender of anv extenuating
<br />ad of Truat-NE 4l98
<br />VMP4R(NE) (0809)
<br />Kluwer Financial Services Page 3 of 9
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