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20�f05270
<br />Lender may, at any time, collect and hold amounts for Esccow 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 Settlemettt Procedures
<br />Act of 1974, 12 U. S. C. Section 2601 et seq. and implementing regulations, 24 CFR Part 3500, as they may be
<br />amended from time to tune ("RESPA"), except that the cusluon or reserve permitted by RESPA for unanticipated
<br />disbursements or disbursements before the Borrower' 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 exceed the amounts permitted to be held by RESPA, Lender
<br />shall account to Borrower for the excess funds as required by RESPA. ff the amounts of funds held by Lender at any
<br />time are not sufFicient to pay the Escrow Items when due, Lender may notify the Borrower and require Bonower to
<br />make up the shortage as permitted by RESPA.
<br />T'he Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If
<br />Bonower tenders to Lender the full payment of all such sums, Borrower' s account shall be credited with the balance
<br />recnaining 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 Secretary, and Lender shall promptly refund any exc�s funds to Bonower.
<br />Immediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be
<br />credited with any balance r�*�+aining 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 premiuxn to be paid by Lender to the Secretary or to the monthly charge by the
<br />Secretary instead of the monthly mortgage insuraace 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 />� 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 Other Hazard Insurance. Borrower sha11 insure all improvennents on the Properly, 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 maitttained in the amounts and for the periods that Lender
<br />requires. Borrower shall also insure a11 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 sha11 be carried with companies
<br />approved by Lender. The insuxance policies and any renewals shall be held by Lender and shall include loss payabte
<br />clauses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss, Borrower sha11 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 malce payment
<br />for such loss directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance
<br />proceeds may be applied by Lender, at its option, either (a) to the radnction of the indebYedness under the Note and
<br />this Security Instrument, first to any delinquent atnounts 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 wluch aze referred to in paragraph 2, or
<br />change the amount of such payments. Any excess insurance proceeds over an amount required to pay a11 outstanding
<br />indebtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />In the event of foreclosure of this Security Instrument 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 �cupy, establish, aad use the Property as Borrower's principal residence within sixty
<br />days after the execution 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 Borrower's principal residence for at least one year after the date of
<br />occupancy, unless Lender determines that requirement will cause undue hazdship for Bonower, or unless extenuating
<br />circumstances elcist which are beyond Borrower's control. Bonower shall notify Lender of any extenuating
<br />circumstances. Borrowex shall not commit waste or destroy, damage or substantially change the Property or allow the
<br />Property to deteriorate, reasonable wear and tear excepted Lender may inspect the Property if the Property is vacant
<br />or abandoned or the loan is in default. Lender may talce reasonable action to protect and preserve such va�nt or
<br />8801026452 ���$�$ 01026452
<br />Intffats: �� '+�
<br />VMP�-4N(NE) �oao��.o� Page 3 of 8
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