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<br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exc.eed the
<br />maximum 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 et seq. and implementing regvlations, 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 aze 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 pernutted to be held by RESPA, Lender
<br />shall account to Bonower for the excess funds as required by RFSPA. If the amounts of funds held by Lender at any
<br />time are not sufficient to pay the Fscrow 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 pleflged as addirional security for all sums secured by this Security Instnunent. If
<br />Borrower tenders to Lender the full payment of all such sums, Bonower's account shall be credited with the balance
<br />rem��ning 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 S�retary, and Lender shall promptly refund any excess funds to Borrower.
<br />Immerliately prior to a foreclosure sale of the Property or its acquisition by Lender, Bonower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Appliration 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, sp�ial 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 charges due under the Note.
<br />4. F'ire, Fl�d and Other Hazard Insurance. Bonower shall insure all improvements on the Properiy, whether
<br />now in e�stence or subsequently er�ted, against any hazards, casualries, and contingencies, including fire, for which
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender
<br />requires. Bonower shall also insure all improvements on the Progerty, whether now in existence or subsequently
<br />erected, against loss by Aoods to the extent required by the Secretary. AIl insurance shall be carried with companies
<br />approved by Lender. The inc,�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, Borrower shall give Lender imme�iate notice by ma.il. I.ender may make proof of loss if not
<br />xnade promptly by Borrower. Each insurance company concemed is hereby authorized and directed to make payment
<br />for such loss directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance
<br />procee�s may be applied by Lender, at its oprion, either (a) to the reducrion of the indebte�iness under the Note and
<br />tYus Security Insmiment, 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 Properly. Any application of the proceeds to the
<br />principal shall not extend or postpone the due daxe of the monthly payments which are referred to in paragraph 2, or
<br />change the amount of such payments. Any excsss insurance proceeds over an amount required to pay all outstanding
<br />indebtedness under the Note and this Security Instrument shall be paid to the entiry legally entitled thereto.
<br />In the event of foreclosure of this Security Insmiment or other transfer of ritle to the Properiy thxtt 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 />�. Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application;
<br />I.easeholds. Borrower shall occupy, establish, and use the Properiy as Borrower's principal residence within sixty
<br />days after the ex�urion 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 Bonower's principal residence for at least one year after the date of
<br />occupancy, unless Lender detemunes that requirement will cause undue hazdship for Bonower, or unless extenuating
<br />circiunstances exist which are beyond Bonower's control. Bonower shall notify Lender of any extenuating
<br />FHA Oeed of Trust-NE
<br />VMP Q
<br />Wolters Kluwer Financial Services
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<br />4/98
<br />VMP4R(NE) (0809)
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