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F 7
<br />go. 10588^
<br />I. Payattal of Pttadpol. Mental mad Late Charge. Borrower shall pay when due the principal of, and interest on, the debt
<br />evidenced by the Note and late charges due under the Note.
<br />2. Months hymtats of Tales. losous a aid Otter Charges. Borrower shall include in each monthly payment, together with
<br />the principal and Interred as an forth in the Note and any late charges, an installment of any (a) taxes and special assessments
<br />levied or to be levied against the Property, (b) leasehold payments or ground rents on the Property, and (c) premiums for
<br />insurance required by ParMaph 4.
<br />Each monthly Installment for items (a), (b) and (e) shall equal one-twelfth of the annual amounts, as reasonably estimated by
<br />Lander, plum an amount sufficient to maintain an additional balance of not more than, one -sixth of the estimated amounts. The
<br />NO annual amount for each item shall be accumulated by Lender within a period ending one month before an item would
<br />become drdlnquent. Lender shall hold the amounts collmted in trust to pay items (a), (b) and (c) before they become delinquent.
<br />If at any time the toW of the payments held by Lender for items (a). (b), and (c), together with the future monthly payments
<br />for such items payable to Lander prior to the due dates of such items, exceeds by more than one -sixth the estimated amount of
<br />Payments Required to pay such ktan when due, and if payments on the Note are current, then Lender shall either relmod the
<br />excess ova one -sixth of the estimated payments or credit the excess over one -sixth of the estimated payments to, subsequent
<br />payments by Borrower. at Use opfixt of Borrower. If the total of the payments made by Borrower for item (a). (b), or (c) is
<br />imufficlent to pay the item when due. then Borrower shall pay to Lender any amount necessary to make up the deficiency on or
<br />before the due the item becomes due.
<br />As wed in this Security Instrument. "Secretary" means the Secretary of Housing and Urban Development or his or her
<br />denigtsoe. Most Security Instruments insured by the Secretary are insured under programs which require advance payment of the
<br />entire nwrkV ge insurance premium. If this Security Instrument is or was insured under a program which did not requireadvance
<br />payment of the entire mortgage insurance premium, then each monthly payment shall also include either: (i) an installment of the
<br />asmmd mortgage insurance premium to be paid by Lender to the Secretary. or (u) a monthly charge instead of a mortgage
<br />iastuaooe premium if this Security Instrument is held by the Secretary. Each monthly installment of the mortgage insurance
<br />premium shall be in ao amount sufficient to accumulate the full annual mortgage insurance premium with Lender one nswnth
<br />prior to the date the NU annual mortgage insurance premium is due to the Secretary, or if this Security Instrument is held by the
<br />Secretary, 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 payment of all sums secured by this Security Instrument, Borrower's account shall be
<br />credited with the balance remaining for all installments for items (a), (b) and (c) and any mortgage insurance pmeasium
<br />installment that Lender has not become obligated to pay to the Secretary. and Lender shall promptly refund any excess funds to
<br />Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender. Borrower's account slhaq be
<br />credited with any balance remaining for AU instslh...s::s S r :terns (a). (b) and (c).
<br />3.A_.- 11---of Paymnts. 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 Leader to the Secretary or to the monthly charge by the Secretary
<br />instead of the monthly mortgage insurance premium, unless Borrower paid the entire mortgage insurance premium when this
<br />Security Instrument was signed;
<br />Q 0�, to any taxes. special assessments, leasehold payments or ground rents, and tire, flood and other hazard insurance `t
<br />premluans, ar required; �.
<br />THI , to interest due under the Note;
<br />F�, to amortization of the principal of the Note; :
<br />tto late charges due under the Note.
<br />d. Fbv, Flood MW Other HaRard huasraa I - Borrower shall insure all improvements on the Property. whether now in existence
<br />or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which Lender requires insurance.
<br />Tbls insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shall also insure all
<br />I' ^
<br />improvememts on the Property, whether now in existence or subsequently erected, against loss by floods to the extent required by
<br />the Secretary_ AU insurance shall be carried with companies approved by Lender. The insurance policies and any renewals shall
<br />be held by .ender and shall include lom payable clauses in favor of, and in a form acceptable to, Lender.
<br />In the event of loss. Borrower shall gave Lender immediate notice by mail. Lender may make proof of loss if not made prompt-
<br />ly by Borrower. Each insuriulce company concerned is hereby authorized and directed to make payment for such loss directly to
<br />lender, instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be appWed by Lender. its
<br />at
<br />option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument. first to any delinquent
<br />amounts applied in the order in Paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of the
<br />;?
<br />damaged property. Any application of the proceeds to the principal shall not extend or postpone the due date of the monthly
<br />payments which are referred to in Paragraph 2, or change the amount of such payments. Any excess insurance proceeds over an
<br />amount required to pay all outstanding indebtedness,4 Mer the Note and this Security Instrument shall be paid to the entity legab
<br />ly entitled thereto.
<br />f '
<br />k In the event of foreclosure of thi Security Instrument or other transfer of title to the Property that extinguisUms tree in-
<br />debtedness, all right, title and interest of Borrower in and to insurance policies in force shag pass to the purchaser.
<br />S. Prt'wFvdloa and IMakfanoace of the Propa l.w. Leseebolds. Borrower shall not commit waste or destroy, damage or
<br />substantially change the tF"roperty or allow the PrcWny to deteriorate, reasouabic wear and tear excepwa.:Ander may inspect
<br />the property if the property is vacant or abandoned o; she loan is in default. Lender may take reasonably action to protect and
<br />preserve snob vacant or abandoned pia„' ny. If this Security Instmormt is on a leasehold. Borra%er shall comply with the,Trovi-
<br />siew oR the 'eQ:e. If 16-nowcr acquires 'sea title to dw Property, attz leasehold and fee title sUtaad not be merged unlrss Leader
<br />agree to" he merger in writing.
<br />f. Chem to Borrower sad ProtaNloa of Leatger's Rights In the Property. Borrower shali pay all governmental or municipal
<br />ch irgex. Men and impositions that are not included in Paragraph 2. Borrower shall nay these oblisatinnx nn tirnr di ow fly to the
<br />entity witted is owed the payment. If failure to pay would adversely affect Lender's interest in the Property, up' on Lender's re-
<br />quest Borrower shall promptly furnish to Lender receipts evidencing these payments.
<br />If Borrower fails to matte these payments or the payments required by Paragraph 2. or fails to perform any other covenants and
<br />Agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights in
<br />the Prey (such as a proceeding in bankruptcy. for condemnation or to enforce laws or regulations), then Lender may do and
<br />pay whatever is necessary to protect the value of the Property and Lender`s trigbis in the Property. including payment of enures.
<br />harard iwwasce and other items mentioned in Paragraph 2.
<br />Any amounts disbursed by lender under this Paragraph shall become an a&i,nonal debt of Borrower and he secured by this
<br />Security Inururnenl. These amounts shall bear interest from the date of dobsusement. at the Note rare, and at the option of
<br />Lender. shall be imum"ely due and payable.
<br />7. Gddestaaatba. The proceeds of any award or claim for damages. direct or consequential, in connection with any condem.
<br />nation or other taking of any part of the Property. or for conveyance in place of condemnation, hereby
<br />are assigned and shall be
<br />L paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Securty Instru-
<br />ment. Lender shall apply such Proceeds to the reduction of the indebtedness under the Note and t his Security Instrument, first to
<br />any delinquent amounts applied to the order provided in Paragraph). &W then
<br />r,
<br />to prepayment of principal An% application of
<br />the proceeds to the principal shall not emend or postpone the due date of the monthdt payments, which are referred t►, art
<br />Paragraph 2. or change the amount of such pa)nwnts. Any excec,t
<br />to
<br />pre%wds oser an amount regwre.l to pa% all outoandinit in•
<br />debwdness udder the Note and this Struaty Instrument -hall be paid to the entity legalh eniitted therrio
<br />..
<br />S. Fees. 1 ender ttta) collnl fees and charge4 aurhotued to) the ticcrcur�
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