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20110�149 2, Monthly Payment of Taues, Insuranceand Uther Charges.Bonower shall include in each monthly payment, together with the principal and interest as set forth in the Note and any late charges, a sum for (a) taxes and special assessments levied or to be levied against the Property, (b) leasehold payments or ground rents on the Property, and (c) premiums for insurance required under p�ragraph 4. In any year in which the Lender must pay a mortgage insurance premium to the Secretary of Housing and Urban Development ("Sacretary"), or ita any year in which such premium would have been required if Lender still held the Security Instrument, each monthly payment shall also include either: (i) a sum for the annual mortgage insurance premium to be paid by Lender to the Secretary, or (ii) a monthly charge instead of a mortgage insurance premium if this Security Insirument is held by the Secretary, in a reasonable amount to be determined by tke Secretary. Except for the monthly charge by the Secr�tary, these items are called "Escrow Items" and the sums paid to Lender are called "Escrow Funds." Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the maximum amount that may be required for Borrower's escrow account under the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. Section 2601 et seq. and implementing regttlations, 24 CFR Part 3500, as they may be amended from time to time ("RESPA"), except that the cushion or reserve permitted by RESPA for unanticipated disbursements or disbursements before the Borrower's payments are available in the account may not be based on amounts due fvr the mortgage insurance premium. If the amounts held by Lender for Escrow Items exceed the amounts permitted to be heid by RESPA, Lender shatl account to Borrower for the excess funds as reqaired by RESPA. If the amounts of funds held by Lender at any time are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to make up the shortage as permitted by RESPA. The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If Borrower tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance remaining for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has not become obligated to pay to the Secretary, and Lender sha11 promptly refund any excess funds to Borrower. Immediately prior to a foreclosure sale of the Property or its acquisitian by Lender, $orrower's account shall be credited with any balance remaining for all installments for items (a), (b), a.nd (c). 3. Applicationof Paymen#s.All payments under paragraphs 1 and 2 shall be applied by Lender as follows: First, to the mortgage insurance premium to be paid by Le►ader to the Secretary or to the mvnthly charge by the Secret�ry instead of the monthly mortgage insurance premium; on to any taxes, specia[ assessments, leasehold payments or ground rents, and fcre, flood and other hazard insurance premiums, as required; Thisd. to interest due under the Note; Fourth• to amortization of the principal of the Note; and Fifth. to late cha.rges due under the Note. 4. Fire, Fioodand Other Hazard Insurance.Bonower shail insure all improvements on the Property, whether now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fue, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shall also �nsure all improvements on the Property, whether now in existenca or subsequently erected, against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies appsoved by I,endea. The insurance policies and any renewals shall be held by Lender and shall include loss payable clauses in favor of, and in a form acceptabie to, Lender. FHA Mnr�qage WITH MERS-NE VMP @ �i�i�i�i�iii�ii%�iiiii'ii i i�iiiiiiiisii�iiiii q 3 3� 0�10 Revlsed 4J98 Amended 7l04 VMP4N(N� (1106J.00 Page 3 nf 90 � �