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�p110434
<br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to e!cceed the
<br />rnaximum amount that may be required for Borrower s escrow account under the Real Estate Settlement Procedures
<br />Act of 1974, 12 U.S.C. Section 2601 e[ .sey. 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 Borrower's payments are available in the account rnay not be based on
<br />amounts due for the rnort�age insurance premium. ,
<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 amourits of funds held by Lender at any
<br />time are not sufficient to pay the Lscrow Items when due, Lender may notify the Borrower and require Bonower 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 Inatrument. If
<br />Borrowcr tcndcrs to Lcndcr thc full paymcnt of all such sums, Borrowcr's account shall bc crcditcd with thc balancc
<br />remaining for all installment items (a), (b), and (c) and any rnortgage insurance premium installment that Lender has
<br />not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Aorrower.
<br />Immediately prior to a forec;losure sale of the Property or its acyuisition by Lender, Borrower's account sh�ll be
<br />crcditcd with any balancc rcmaining for all installmcnts for itcros (a), (b), and (c).
<br />3. Application of Payments. All payments under paragraphs 1 and Z 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 />Sccond, to any taxcs, spccial asscssmcnts, lcaschold paymcnts or ground rents, and firc, flood and othcr hazard
<br />insurance premiums, as requued;
<br />Third, to interest due under the Note;
<br />Fourth, to amortization of the principal of the Note; and
<br />Fifth, to late charges due under the Note.
<br />4. Fire, Flood and ()ther Hazard Insurance. Bonower shall insure all improvements on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />Lender requires insurance. .This insurance shall be maintained in the amounts and for the per'tods 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 insurance policies and any renewals shall be held by Lender and shall include Loss payable
<br />clauscs in favor of, and in a form acccptablc to, Lcndcr.
<br />In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Bonower. Each insurance company concerned is hereby authorized and directed to make payment
<br />for such loss d'uectly to Lender, instead of to Borrower and to Lender jointly. All or �ny p�rt of the insurance
<br />procccds may bc applicd by Lcndcr, at its option, cithcr (a) to thc rcduction of thc indcbtcdncss undcr thc Notc 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 darnaged Property. Any application of the proceeds to the
<br />principal sh�ll not extend or postpone the due date of the monthly payments which are referred tv in p�r�graph 2, or
<br />changc thc amount of such paymcnts. Any cxccss insurancc procccds ovcr an amount rcquircd to pay all outstanding
<br />indebtedness ttnder the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosure of this Security tnshument or other transfer of title to the Property that extinguishes
<br />the indebtedness, all right, title and interest of Bonower 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 Application;
<br />Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days aftcr thc cxccution of this Sccurity Instrumcnt (or within sixty days of a latcr salc or transfcr of thc 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 cause undue hardship for Borrower, or unless extenuating
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any extenuating
<br />circumstanccs. Borrowcr shall not commit wastc or dcstroy, damagc or substantially changc thc Property or allow thc
<br />Property to deteriorate, reasonable wear and tear eYCepted. Lender may inspect the Property if the Properly is vacant
<br />or abandoned or the loan is in default. Lender may take reasonable action to protect and preserve such vacant or
<br />II i I II li��l I III I I I� IIIIIII I Ilil il II II I I I I I III I�II Inttials: �N/N�C/
<br />VMP �-4N(NE) �oao7�.oi Page 3 of 8
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