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LA
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<br />90-- 105803
<br />Each monthly installment for items (a), (b), and Ic) Shall equal one-twelfth of the annual tnnuunl%, as rcasonahly estimated
<br />by lender, plus an amount sufficient to maintain an additional balance of not more than tmc -%Wh of the estimated amount%,
<br />The full annual amount for each item shall be accumulated by Lender within u period ending one month before an item would
<br />become delinquent. lender shall hold the amounts collected in trust to pay items (a), (b), and (c) before they become delinquent.
<br />If at any time the total of the payments held by Lender for items (a), (b►, and (c). together with the future monthly payments
<br />for such items payable to Lender prior to the due dates of such items, exceeds by more than one -sixth the estimated amount
<br />of payments required to pay such items when due, and if payments on the Note are current, then Lender shall either refund
<br />the excess over one -sixth of the estimated payments or credit the excess over one -sixth of the estimated payments to subsequent
<br />payments by Borrower. at the option of Borrower. If the total of the payments made by Borrower for item in), (b), or (c)
<br />is insufficient to pay the item when due, then Borrower shall pay to Lender any amount necessary to make up the deficiency
<br />on or before the date the item becomes due.
<br />As used in this Security Instrument, "Secretary" means the Secretary of Housing and Urban Development or his or her
<br />designee. Most Security Instrument, insured by the Secretary are insured under programs which require advance payment of
<br />the entire mortgage insurance premium. If this Security Instrument is or was insured under a program which did not require
<br />advance payment of the entire mortgage insurance premium, thrn each monthly payment shall also include either: (i) an installment
<br />of the annual mortgage insurance premium to be paid by Lender to the Secretary, or (ii) a monthly charge instead of a mortgage
<br />insurance premium if this Security Instrument is held by the Secretary. Each monthly installment of the mortgage insurance
<br />premium shall be in an amount sufficient to accumulate the full annual mortgage insurance premium with Lender one month
<br />prior to the date the full annual mortgage insurance premium is due to the Secretary, or if this Security Instrument is held
<br />by the Svcrettuy, each monthly charge shall be in an amount equal to one - twelfth of one -half percent of the outstanding principal
<br />balance due on the Note.
<br />If Borrower tenders to Lender the full por)ment of all sums secured by this Security Instrument, Borrower's account shall
<br />be credited with the balance remaining for ali installments for items (a). (b), and (c) and any mortgage insurance premium
<br />installment that Lender has not become obligated to pay to the Secretary. and Lender shall promptly refund any excess funds
<br />to Borrower. Immediately prior to, a foreclosure sale of the Property or its acquisition by Lender. Borrowle -r's account shall
<br />be credited with any balance remaining for all installments for items (a), (b), and (c).
<br />3. Applientlon of Payments. All payments under pacuStaphs t ;�-W 2 shall be applied by Lender as follows:
<br />Firs:., to the mortgage insuranct premium to be paid Ira. Lender to the Secretary or to the monthly charge by the Secretary
<br />instead of the monthly mortgage insurance premium, ut le9 s Borrower paid the entire mortgage insurance premium when this
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<br />Security Instrument was signed;
<br />Second, to any taxes. special assessments. leasehold payments or ground rents, and fire. floxod and other hazard insurance
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<br />premiums, as required;
<br />11rd , to interest due under the Note;
<br />1 .7th,
<br />to amortization of the principal of the Note.
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<br />Fitch, to late charges due under the Note.
<br />4. tire, Mad stead Other Hazard Insuratace. Borrower shall insure all improvements on the Property, whether now in
<br />.existence for subsequently erected. against any hazards, casualties, and contingencies, including fire. for which Lender vtquires
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<br />insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shall also
<br />insure all improvements on the Property, whether now in existence or subsequently erected, against loss by ff6ods to the extent
<br />required by the Secretary. All insurance shall be carried with companies approved by Lender.': he insurance policies and any
<br />renewals shall be held by Lender and shall include loss payable clati5es in favor of, and in a form acceptable to, Leader.
<br />In the event of loss, Borrower shall give Lender immediate nonce by mail. Lender may make proof of loss if not made
<br />promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make pavement for such loss
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<br />directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be applied
<br />by Lender, at'its option. either (a) to the reduction of the indebtecdiavis under the Note and this Security Instrument, first to
<br />any delinquent amounts applied in the order in Paragraph 3, and then to prepayment of principal. or (b) to the restoration
<br />or rep$8T of the damaged property. Any application of the proceeds to the principal shall not extend or postpone the due date
<br />of the traanthly payments which are referred to in Paragraph 2, or change the amount of such payments. Any excess insurance
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<br />proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be
<br />paid to the entity legally entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer of title to else (Property that extinguishes the
<br />indebtedom, all right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
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<br />S. Preservation and Maintenance of the Properly. JAaseheldst. Borrower shall not commit waste or destroy, damage or
<br />substantially change the Property or allow the Property to deteriorate. reasonable wear and tear excepted_ Lender may inspect
<br />the property if the property is vacant or abandoned or the loan is in default. Lender may take reasonable action to protect
<br />and preserve such vacant or abandoned property. If this Security Instrument is on a leasehold. Borrower shall comply with
<br />the pror.Wons of the lease. If BorTerwer acquires fee title to the Property, the leaW;ald and fee title shall not be merged unless
<br />Lender aaretx to the mercer in writing.
<br />6. C<.strges to Borrower and Prowdloa of Lender's Rights in the Property. Borrower shall pay all governmental or municipal
<br />charges, fines and impositions that are not included in Paragraph 2. Borrower shall pay these obligations on time directly to
<br />the en W" which is owed the payment. If failure to pay would adversely affect Lender's interest in the Property, upon Lender's
<br />request Borrower shall promptly furnish to Lender receipts evidencing these payments.
<br />If Borrower fouls to make these payments or the payments required by Paragraph 2, or fails to perform any other covenants '
<br />and agreements contained in this Security Instrument. or there is a legal proceeding that may significantly affect Lender', rights
<br />in the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations). then Lender may
<br />do and pay whatever is necessary to protect the value of the Property and Lender's rights in the Property, including payment
<br />of taxes, hazard insurance and other items mentioned in Paragraph 2.
<br />Any amounts disbursed by Lender under this Paragraph shall become an additional debt of Borrower and he secured
<br />by this Security Instrument. These amounts shall bear interest from the date of dr,butwment. at the Note rate, and at the
<br />option of Lender, shall be immediately due and payable.
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<br />7. Condessnuttion. The proceeds of any award or claim for damages, direct or consequennal, to connection with in)
<br />condemnation or other taking of any pan of the Property, or for conveyance in place of condemnation, are hctch% assigned
<br />and shall be paid to Lender to the extent of the full amount of the indeMcdncss that remain. unpaid under the Note and this ,.
<br />Security Instrument. Lender shall apply such pttwcWs to the reduction of the tndehtednea under the Now and this Securtts
<br />Instrument, first to any delinquent amounts applied in the ordct pros rdcd tit Pat agr,rph 1. .111d then a► t►rs•t►,,> rtrrnt ,it to un rta►l
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