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<br />L postal of pro apip al, Iatereat sal Law CbsW. Borrower shall pay when due the principal of, and interest tun, the debt
<br />evidenced by the Note and late charges due under the Note.
<br />2. MaNW hyttteab of Taaa,1wwraat+e aced Other CkWV1. Borrower shall include in each monthly payment, toltether with
<br />the principal and interest as set forth in the Note and any late chatil a. an Installment of any (a) taxes and special assessments
<br />levied or to be kvfed against the Property, (b) leasehold palmrata or ground rents on the Properly, and (c) premiums for
<br />Insurance required by Paryrsph 4.
<br />Each monthly instslbnem for Item (a), (b) and (c) shall equal one - twelfth of the annual amounts. as reasonably estimated by
<br />Leader. plus an amount suf ficLent 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 Leader within a 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 />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 />payments required to pay such items when due. and if payments on the Note we current. then Leader shall either refund the
<br />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 (a), (b), or (c) is
<br />insufficient to pay the item when due, rhea Borrower shall pay to Lender any amount necessary to make up the deficiency on or
<br />before the date the item beoomes due.
<br />As used in thin Security Insuumeni. "Secretary" meatus the 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 ins *ism premium• If this security Instrument is or was insured under a program which did not require advance
<br />payment of the entire mortgafte insurance premium, then each monthly payment shall also Include either: (1) an installment of the
<br />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 iasvu meat is held by the
<br />Secretary, each monthly charge shall be in an amount equal to one - twelfth of one -half percent of the ourstanding principal
<br />balance due on the Note.
<br />If Borrower tenders to Lender the full payment of all sutra 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 premium
<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 shall be
<br />credited with any balance remaining for all installments for items (a). (b) and (c).
<br />3, Application of iaayments. All payments under paragraphs 1 and 2 shall be applied by leader as follows:
<br />FIRST. to the mortgage insurance premium to be paid by Lender to the Secretary or to she monthly charge by the Secretary
<br />instead of the monthly mortgage insurance premium, unless Borrower paid the entire monMe insurance premium when this
<br />Security Instmment was signed.
<br />SECOND, to any taxes, special assessments, teasebold payments or ground rents, and fat, stood and other hazard insurance
<br />Premiums, as required;
<br />THIRD. to interer, due under the Note,
<br />FOURTH, to amoraiution of the principal of the Note,
<br />Fri, to late charges due under the Note.
<br />4. Fire, flood amd Odh{er Hazard Iasaraaee- 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 />This insurance shall be maintahied in the amounts and for the periad- the Ler.�. req•-ium E=ora— dot► also in-t„ce art
<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. Lender.
<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 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 applied by Lender. at its
<br />option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, fins to any delinquent
<br />amounts applied in the order in Paragraph 3. and then to prepayment of principal. or (irk to the restoration or repair of the
<br />damaged property. Any application of the proceeds to the principal shall not extend or pos.poae the due date of the monthly
<br />payments which are referred to in Paragraph 2. or change the amount of such payments. Any caress insurance proceeds over an
<br />amount required to pay all outstanding indebtedness under the Note and this Swurity instrument shall be paid to the entity legal-
<br />ly entitled thereto.
<br />Is the event of foreclosure of this Security Instrument or other transfer of title to'.1he Property that extinguishes the in-
<br />delh,eldness, all right, title and interest of Borrower in and to insurance policies in fora; shat pass to the purchaser.
<br />& !Preservation sad Maintenance of the Pro". Leaseholds. Borrower shall not ccimmi; waste or destroy, damage or
<br />substantially ehaaae the Property or allow the Feoperty to deteriorate, reasonable wear and rear excepted. Lender may inspect
<br />the property if tbz property is vacant or abandoned or the loan is in default. Leader may take reasonable acdon to protect and
<br />preserve such vacant or abandoned property. lfthis Security Instrument is on a leasehold. Bbinower shall coinply with the provi-
<br />sions of the lease. Lf, Rarrower =Vairet fee title to the Property, the leasehold and for tt k s! E, not be merged unless Lender
<br />agrees to the merger in writing,.
<br />6. Chula to Mart r.ww wW I tteedoa of Leader's Rights in the Property.. Sorraiuie: dm)! pay all governmental or municipal
<br />charges. fines and imp rsitidns iitdt are not included in Paragraph 2. Borrower. sI7Wt pay these obligations on time directly to the
<br />entity which is owed the pzy=' a7r . if failure to pay would adversely affect Lendet'y interest in the Property, upon Lender's re-
<br />quest Borrower shall promptly, furnish to Lender receipts eritfeacing these payments. i ••
<br />It Borrower fails to make these payments or the piy Ments rapdrad by Paragraph 2, oz fballi in.perform any other covenants and
<br />agreements contained in this Secudty instntment, or there is tL legal proceeding that may- sitpil scantly affect Lender's lights- in
<br />the Property (such as a proceeding in bankniptcy, for condemnation or to enforce taws or. mTulations). 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, al. the Note rate, and at the option of
<br />Lender, shall be immediately due and payable.
<br />7. Condemnation. 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 df 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. Lender shall apply ssich 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 Dote and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />S. Fees. Lender may collect fees and charges authorized by the Secretary.
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