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241�0402�
<br />for
<br />of
<br />the
<br />FHA
<br />VMP
<br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exce�d the
<br />um amount that may be required for Bonower's escrow account under the Real Estate Settlement ProcEdures
<br />f 1974, 12 U.S.C. Se�tion 2601 et seq. and implementing regularions, 24 CFR Part 3500, as they may be
<br />ded from time to time ("RESPA"), except that the cushion or reserve permitted by RESPA for unanricipated
<br />sements or disbursements before the Borrower's payments are available in the account may not be based on
<br />ts 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, Lsnder
<br />account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any
<br />are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to
<br />up the shortage as permitted by RESPA.
<br />The Escrow Funds are pleflged as additional security for all sums s�ured by this Security Instrument. If
<br />wer tenders to Lender the full payment of all such sums, Bonower's account shall be credited with the balance
<br />' g for all installment items (a), (b), and (c) and any mortgage �nc„rance premium installment that Lender has
<br />ecome obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Bonower.
<br />ediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be
<br />ted with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Application of Payments. All payments under pazagraphs 1 and 2 shall be applied by Lender as follows:
<br />First, to the mortgage insurance premium to be paid by Lender to the S�retary or to the monthly charge by �e
<br />tary 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 />ance 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 charges due under the Note.
<br />4. �re, Flood and Other Hazard Insurance. Bonower shall insure all improvements on the Property, whether
<br />in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />er requires insurance. This insurance shall be ma.intained in the amounts and for the periods that Lender
<br />es. Bonower shall also insure all improvements on the Property, whether now in existence or subsequently
<br />ed, against loss by floods to the extent require�l by the Secretary. All insurance shall be carried with companies
<br />veri by Lender. The insurance policies and any renewals shall be held by Lender and shall include loss payable
<br />es in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Borrower shall give Lender immediate norice by mail. Lender may make proof of loss if not
<br />promptly by Bonower. Each insurance company concemefl is hereby authorized and directed to make payment
<br />ch loss dir�tly to I,ender, instead of to Borrower and to Lender jointly. All or any �art of the insurance
<br />may be applied by Lender, at its oprion, either (a) to the reduction of the indebtedness under the Note and
<br />�uriry InstYVment, first to any delinquent amounts applied in the order in paragraph 3, and then to prepayment
<br />' cipal, or (b) to the restoration or repair of the damagefl Progerty. Any application of the proceeds to the
<br />ipal shall not extend or postpone the due date of the monthly payments which aze referre� to in paragraph 2, or
<br />e the amount of such payments. Any excess �n�rance proceeds over an amount r�uired to pay all outstanding
<br />te�iness under the Note and this S�uriry Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of fore�losure of this S�urity Instrument or other transfer of title to the Property that e�ctinguishes
<br />debtedness, all right, ritle and interest of Bonower in and to insurance policies in force shall pass to the
<br />5. Occupancy, Preservataon, Maintenance and Protection of the Pro�rty; Borrower's Loan Appliration;
<br />eholds. Bonower shall accupy, establish, and use the Properiy as Bonower's principal residence within sixty
<br />after the execution of this Security Instrument (or within sixty days of a later sale or transfer of the Property)
<br />�hall continue to occupy the Properiy as Borrower's principal residence for at least one yeat after the date of
<br />�ancy, unless LQnder determines that requirement will cause undue hardship for Bonower, or unless extenuating
<br />mstances exist which are beyond Bonower's control. Bonower shall norify Lender of any extentaating
<br />red of Truat-NE
<br />i
<br />Kluwer Financial Services
<br />4/96
<br />VMP4R(NE) (0809)
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