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20�105�0�
<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RFSPA, 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, Lender may notify the Borrower and require Borrower to
<br />make ng the shortage as germitted by RESPA.
<br />The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If
<br />Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance
<br />remaining for all installment items (a), (b), and (c) and any mortgage insurrance premium installment that Lender has
<br />not become obligated to pay to the Secretary, and I.ender shall promp�ly refund azry excess fiunds ta Borrower.
<br />Immediately prior to a foreclosure sale of fhe Froperty or its acquisition by Lender, Borrower's account shall be
<br />credited wifh any balance remaining 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 premium to be paid by Lender to the Secretary or to the monthly charge by the
<br />Secretary instead of the monthly mortgage �nc�.*ance premium;
<br />Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazazd
<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, 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, casualties, and contingencies, including fire, for which
<br />Lender requires insurance, This insurance sha11 be ma,intained in the amounts and for tfie periods that Lender
<br />requires. Borrower shall also insure all improvements on the Properiy, whefher now in eustence ar subseque�ly
<br />erected, against loss by floods to the extent required by the 5ecretary. A11 Yn�*�nc;e shsll be carried With companies
<br />approved by Lender. The in�*�nsp 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 immediate notice by mail. Lender ma.y make proof of loss if not
<br />made promptly by Borrower. Each insurance company concerned is hereby authorized and directed to m.ake payment
<br />for such loss direcfly to Lender, instea.d of to Borrower and to Lender jointly. All or any part of the incn*ansp
<br />proceeds may be applied by Lender, at its option, either (a} to the reduction of the indebtedness under the Note 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 damaged Property. Any applica,tion of the proceeds to the
<br />princigal shall not extend or posigone the due date of the monthly payments which aze referred to in paragraph 2, or
<br />change the amount of such payments. Any excess insiu�ance proceeds over an amount required to pay all outstanding
<br />indebtedness under the Note and this Security Insttvment shall be paid to the entity legally entifled thereto.
<br />In the event of foreclosure of this Security Instntment or other transfer of tifle to the Progerty that extinguishes
<br />the indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the
<br />purchaser.
<br />5. Occnpancy, PreserPation, 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 sucty
<br />days after the execution of this Security Inshvment (or within sixty da.ys of a later sale or transfer of the Properiy)
<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 Borrower, or unless externiating
<br />circumstances exist which are beyond Borrower's control. Borrower shall notify Lender of any exte�ating
<br />circumstances. Borrower 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 Properly if the Property is vacant
<br />or abandoned or the loan is in default. Lender may take reasonable action to protect and preserve such vacant or
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