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201�05Q90
<br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the
<br />maximum amount that may be required for Bonower's escrow account under the Real Estate Settlement Procedures
<br />Act of 1974, 12 U.S.C. Secrion 2601 et seq. and implementing regularions, 24 CFR Part 35�, as they may be
<br />amended from time to time ("RESPA"), except that the cushion or reserve permitted by RESPA for unanricipated
<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 exc�eed 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 Lender at any
<br />time are not sufficient to pay the Escrow Items when due, L,ender may notify the Bonower and require Bonower to
<br />make up the shortage as permitted by RFSPA.
<br />The Escrow Funds are pledged as additional security for all sums s�ureri by this Security Instrument. If
<br />Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be eredited with the balance
<br />remaining for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has
<br />not become obligated to pay to the Seeretary, and Lender shall promptly refund any exc.ess funds to Borrower.
<br />Immediately prior to a fore,closure sale of the Property or its acquisirion by LQnder, Bonower's account st�all be
<br />ereflite� with any balance rP**�aining 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 the
<br />Secretary 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 />insurance premiums, as required;
<br />Third to interest due under the Note;
<br />Fourth to amortization of the principal of the Note; and
<br />Fifth, to late chazges 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 erected, against any hazards, casualries, and contingencies, including fire, for which
<br />Lender requires insurance. This insurance shall be ma.intaine� in the amounts and for the periods that Lender
<br />requires. Bonower shall also insure all improvements on the Properly, whether now in existence or subsequently
<br />erected, aga.inst loss by floods to the extent required by the S�retary. All incnrance shall be carried with companies
<br />approved by Lender. The �nc„rance 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, Bonower shall give Lender immediate notice by mail. Lender may make proof of loss if not
<br />made promptly by Borrower. Each insurance company concerned is hereby authorized and dir�ted to make payment
<br />for such loss directly to Lender, instead of to Bonower and to Lender jointly. All or any part of the inc„rance
<br />proceefls may be applied by Lender, at its option, either (a) to the reducrion of the indebtedness under the Note and
<br />this S�urity Instnunent, 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 aze refened to in paragraph 2, or
<br />change the amount of such payments. Any excess insurance proce�ds over an amount required to pay all outstanding
<br />indebtedn�s under the Note and this S�urity Instrument shall be paid to the entity legally enritled thereto.
<br />In the event of foreclosure of this Security Instivment or other transfer of title to the Properly that extinguishes
<br />the indebtedness, all right, ritle 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 Application;
<br />I.easeholds. Bonower shall occupy, establish, and use the Property as Borrower's principal residence within sixty
<br />days after the execution of this Security Insixument (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 e�st which are beyond Bortower's control. Bonower sha11 norify Lender of any e�enuating
<br />FHA Deed of Trust-NE 4/96
<br />VMP 0 VMP4RINE) �0809)
<br />Wolters Kluwer Financial Services Page 3 of 9
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