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<br />Lender may, at mry time, collect and hold �nounLs for Escrow Items in an aggregata �ount not to exc�ed the
<br />maximum amowrt that may be re�uired for Borrower' s escrow account under the Real Estate Settlemeat Pra�iues
<br />Act of 1974, 12 U. S. C. Se�tion 2601 et seq. and implementing regulatians, 24 CFR Part 3500, as they may be
<br />amended from time to time ("RESPA"), except that the cushion or reserve germitted by RESPA for imanticipated
<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 far Escrow Items exc�d the amoimts permitted to be held by RESPA, I.enci�'
<br />shall account to Borrower for the excess funds as requirefl by RESPA If the am,�wnts of funds held by Lender at any
<br />time are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower aad re�uire Borrower to
<br />make up the shortage as permitted by RESPA.
<br />The Escrow Funds are pledged as additional security for all sums secure� by this S�urity Instrument If
<br />Borrower tenders to Lender the full payment of all such sums, Borrower' s account shall ba credited with the balance
<br />remaining for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has
<br />not be�ome obligated to pay to the Seeretazy, and Lender shall promptly refund any excess funds to Borroweq'.
<br />Imme�iiately prior to a fore�losure sale of the Property or its acquiaition by I.ender, Borrower' s accowrt shall be
<br />credtited with any balance remaining for all inc�Rtlmentc 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 />F• t, to the mortgage insurance premium to be paid by Lender to the Se�retary or to the monthly charge by the
<br />Secretary instead of the monthly mortgage insurance premium;
<br />Secon 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 />Fourt to amortization of the principal of the Note; and
<br />Fi�ft� to late chazges due under the Note.
<br />4. Fire, Flood and Other Hazard Insarance. Borrower shall insure all improvements on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, far which
<br />I.ender requires insurance. This insurance sha11 be maintained in the amounts and for the periods that Lender
<br />requires. Borrower shall also insure all improvements on the Property, whether now in existence or subsequeutly
<br />erected, against loss by floods to the extent requireri by the Secretary. All insurance shall be c�rried with companies
<br />approved by Lender. The insurance policies and any renewals shall be held by Lender and shall include loss payable
<br />clauses in favor o� and in a form acceptable to, Lender.
<br />In the event of loss, Borrower shall give Lender immeriiate notice by mail. Lender may make proof of loss if no4
<br />made promptly by Borrower. Each insurance company concerned is hereby authorized and dire�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 insurance
<br />proc�eds 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 a�nounts applie� in the order in paragraph 3, and th�► to prepayment
<br />of principal, or (b) to the restoration or repair of the damaged Property. Any application of the proceeds to the
<br />priacipal shall not elctend or �mstpone the due date of the monthly payments which are referreri to in paragraph 2, or
<br />change the a�nount of such payments. Any excess insurance praceeds over an amount rer�uired to pay all outstanding
<br />indebtedness under the Note and this Security Insttvment shall be paid to the entity legally entitled thereto.
<br />In the event of fore�losure of this Security Instrument or other transfer of title to the Property that extinguishes
<br />the indebtedness, a11 right, title and interest of Borrower in and to insurance policies in force shall pass to the
<br />purcbaser.
<br />5. Occnpancy, Preserva�ton, Maintenance and Protect�Ton of the Property; Borrower's Loan Application;
<br />Leaseholds. Bonower shall occupy, establish, �d use the Property as Borrower' s principal residence within sixty
<br />days after the execution of this Security Instrument (ar within sixty days of a later sale or transfer of the Properiy)
<br />and shall continue to occupy the Property as Borrower's princlpal residence for at least one year after the date of
<br />occupancy, unless Lender detemaines that requirement will c�use undue hardship for Borrower, or unless extenuating
<br />circumstances exist which are beyond Borrower' s control. Borrower shall notify Lender of any extenuating
<br />circtm�stances. Borrower shall not commit waste or destroy, damage ar substantially change the Property ar allow the
<br />Properiy to deteriorate, reasonable wear and tear excepted. I.ender may inspect the Properiy if the Property is vac�nt
<br />or abandonerl or the loan is in default. Lender may take rea.sonable action to prote,ct and preserve such vacant or
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