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<br />L MIMI W FfbdW, latarsat Sad bate Marge. Bon'ower'hall pay when due the principal of. and interest on. the debt
<br />evidenced by the Note and late charge' due under the Note.
<br />3. Mess ft llltiweata of Taxes, Imaram aM Otrer MA". Borrower shall Include in each monthly p iytn nt, together with
<br />the principal Stud interest at set forth in the Note and any late charges. an initsHment of any (a) taxts and special assessment'
<br />levied or to be levied against the Property. (b) leasehold payments or ground rents on line Property. and (c) premiums for
<br />insutusce required by Paragraph 4.
<br />Each monthly installment flu items (a). (b) and (c) shall equal one - twelfth of the annual amounts. as reasonably estimated by
<br />Lender. p :us an amount sufficient to maintain an additional balance of not more than one -sixth of the estimated amounts. The
<br />full annual amount for each item shall be accumulated by Lender within a period endins one month before an Item would
<br />become ddinqueat. Lender shall hold the amounts collected in trust to pay items (a). (b) sad (c) before they become delinquent.
<br />it 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 of
<br />paymenta required to pay such Items when due, and If payments on the Note are current, then Lender shall either refund 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 the option of Borrower. If the total of the payments made by Borrower for item (a). (b), or (c) Is
<br />insuftidtl 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 date the item becomes due.
<br />As used In this Security Instrument. "Secretary" means time Secretary of Housing and Urban Development or his or her
<br />designee. Most security instruments insured by the Secretary are insured under programs which require advance payment of the
<br />entire mortgage Insurance premium. If ibis Security Instrwneht is or was insured under a, program which did not require advance
<br />payment of the entire mortgage Insurance premium., than each monthly payment shall also include, either. (1) an installment of the
<br />annual mortgage hmmmoe premium to be paid by Lender to the Secretary, or (ii) a monthly charge instead of a mortgage
<br />Insurance premium if this Security Lwuvmefht is held by the Secretary. Each monthly instlUment of the mortgage insurance
<br />premium shall be in an amount sufficient to a=mulate the full annual mortgage insurance premium with Lender one month
<br />prior to the dastc the full annual mortgage insurance premium is due to the Secretary, or if tills Security Instrtunent is held by the
<br />Secretary. each monthly change shall be in an amount equal to one -tweft of one -half percent of the outstanding principal
<br />balance due our IJ;e Note.
<br />If Borrower tenders to Lender the trill paynnent of ail sat: � secured by this Security Instrument, ac rower's account shall be
<br />credited with the balance remaining for all Installments for items (a). (b) and (c) and any mortgage insurance premium
<br />Installment that Leader 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 bK Learlar. Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a). (b) and (c).
<br />3. AgpBcafts of Paya'ents. All payments under paragraphs 1 and 2 shall be applied by Lender as follows:
<br />EM, to the mortgage insurance premium to be paid by Lender to the Secretary or to the montbiy 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 />SECOND, to any taxes, special assessments. leasehold pall ratettts or ground rents. and file. flood and other hazard insurance
<br />pMME4 s required;
<br />ointerest due under the Note;
<br />, to amortization of the principal of the Note.
<br />jam, to late charges due under the Note.
<br />4. Fire. floor and pubes Hazard h aratsee. Borrower shall insure all improvements on the Property, whether now in existence
<br />^-all '•••, trettPd. a�Rvt any hasar¢c, cawahies, and contingencies. including fee. for which Leader requires insurance.
<br />This insurance shall be maintained In the amounts and for the periods that Lender teq&es. Borrower shall also insure all
<br />Improvements on the Property, whether now in existence or subsequently erected, against loss by floods to the extent required by
<br />the Secretary. All insurance shall be carried with companies approved by Lender. The insurance policies and any renewals shall
<br />be held by Lender and shall include loss payable clauses in favor of, and in a form acceptable to. Leader.
<br />In the event of loss. Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not made prompt-
<br />ly by Borrower. Each insurance company concerned is hereby authorized and directed to matte payment for such loss directly to
<br />Lender. instead of to Borrower and to Lender jointly. AD or any part of the insurance proceeds may be applied by Lender. at its
<br />option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, rust to any delinquent
<br />amounts applied in the order in Paragraph 3, and then to prepayment of principal, or (ter) to the restoration or repair of the
<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 pay minis. Any excess instuanx proceeds aver an
<br />amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legal-
<br />ly entitled thereto.
<br />In the event of foreclosure of this Security Instrument or other transfer of title to the Property that extinguishes the in-
<br />debtedness, all tight, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
<br />S. pce rrtadoa Sad Maintenance of the property. Lernebolds. Borrower shall not commit waste or destroy. damage or
<br />substantially change the Property or allow the Property to dtteriorate, 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 and
<br />preserve such vacant or abandoned property. if this security Instrument is on a leasehold. Borrower shall comply with the provi-
<br />sions of the (ease. It Borr096cr acquires fee title to the Property. the leasehold and fee title shall not be merged unless Lender
<br />agrees to the merger in writing.
<br />d. Charges to Bomorrrer and Protection of Leader's FJ&bts is the prop". Borrower shall pay all governmental or municipal
<br />charge% runes and impositions that are not included in Paragraph 2. Borrower shall pay these obligations on time directly to the
<br />entity which is owed the payment. If failure to pay would adversely affect Lender's interest in the Property. upon Leader's re-
<br />quest Borrower shall promptly furnish to Leader receipts evidencing these payments.
<br />If Borrower fails to make these payments or the payments required by Paragraph L or farts 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 Property (such as a proceeding in bankruptcy, for condemnation or to eaforce Paws or regulations), then Lender may do and
<br />pay whatever is necessary to protect the value of the Property and Lender's rights in the Property, including payment of taxes.
<br />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 be secured by this
<br />Security Instrument. These amounts shall bear interest from the date of disbursement, at the Note rate. and at the option of
<br />Lender. shall be immediately due and payable.
<br />7. Comtteaaafte. 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, are hereby assigned and shall be
<br />paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this Security Instru-
<br />ment. Leader shall apply such proceeds to the reduction of the indebtedness under the Note and this Security instrument, first to
<br />any delinquent amounts applied in the order provided in Paragraph 3, and then to prepayment of principal. Any application of
<br />the proceeds to the principal shall not extend or postpone the due date of the monthly payments, which are referred to in
<br />Paragraph 2. or change the amount of such payments. Any excess proceeds over an amount required to pay all outstanding in-
<br />debtedness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />S. E'en. Leader may collect fees and charges authorized by the Secretary.
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