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<br />Etch monthly installment for items (a). (bl, and (c) shall equal onc- mcifth of the annual amounts, as rca.onably C.liutated
<br />by Lender, plus an amount sufficient to maintain an additional balance of not mo *c than anc• sixth of the a +tinuatcd amounts.
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<br />The full annual amount for each item shall be accumulated by Lender within a period ending one month before an item would
<br />=_
<br />become delinquent. Lender shall hold the amounts collected in trust to pay items (a). (b), and (c) before they become delinquent._
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<br />If at any time the total of the payments held by Lender for items (a), Ib), and (c), together w ith the future monthly payments
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<br />for such items payable to Lender prior to the due date: 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 crier one -sixth of the estimated payments or credit the excess over one -sixth of Cite 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)
<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 />Instruments insured by the Secretary are insured under programs which require advance payment of
<br />;
<br />designee. Most Security
<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, then 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 />the full annual mortgage insurance premium with Lender one month.
<br />premium shall be, in an amount sufficient to accumulate
<br />prior to the date the full annual mortgage insuraerce premium is due to the Secretary. or if this Security Instrument is held
<br />by the Secretary. each monthly charge shall be in an amourtt equal to one - twelfth of one -half percent of the outstanding principal
<br />balamv due on the Note.
<br />if Ei orro-Azt ¢enders to Lender the full payment of all sums secured by this Security Instrumenr.. Borrowers account shall
<br />be credited wi;$o dhe balance remaining for all installments for items W. (b), and (c) and any mortgage insurance premium
<br />has become obligated to to the Secretary. and Lender shall promptly refund any excess funds
<br />f± .
<br />instafln mt that Lender not pay
<br />to Bom twer. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall
<br />be erectited with any balance remaining for all installments for items (a), (b), and (jc).
<br />3. Application of Payments. All payments under paragraphs 1 and 2 shall be applied by Leader as follows:
<br />insurance to I ?e by Lender to the Secretary or to the rnmLdTay charge by the Secretary
<br />f
<br />First, to the mortgage premium paid
<br />instead of the monthly mortgage insurance premiuin, unless Borrower paid the entire mortgage insurance premium when this
<br />Secwii y Instrument was signed;
<br />Second, to any taxes, special assessments, leaseltald payments or ground rents, au:d. IiLe, flood and other hazard insurance
<br />premiums, as regvu Ted;
<br />:: ;4"
<br />Third, to interest due under the Note;
<br />Fourth, to amortization of the principal. (if the Note;
<br />Fifth, to late charges due under the Note.
<br />4 Fire, Flood and Other Hazard Insurance. Borro%-.cr shall insure all improvemcnts on the Property. whether now in
<br />existence or subsequently erected, against any hazards. casualties. and contingencies, including tire, for which Lender requires
<br />be in the arnourts and for the periods than Lender rcwuires. Borrower shall also
<br />imuratice. This insurance shall maintained
<br />insure all improvements on the Property, whether now in existence or subsequently erected, agaiml: loss by floods to the extent
<br />required by the Secretary. All insurance shall be carried with companies approved by Lauder. 7fte insurance policies and any
<br />renxwals shall be held by Lender and shall include loss payable clauses in favor of, aRJ� 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
<br />by Borrower. Each insurance company concerned is hereby authorized and directed to make payment for such 10-m,
<br />promptly
<br />directly to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be appEic:
<br />by Lender, at its option. either (s) to the reduction of the indebtedness under the Note and this Security Instrument, first.t:5a
<br />any delinquent amounts applied in the order in Paragraph 3, and then to prepayment of principal, or (b) to the restoratica
<br />or repair of the damaged property. Any application of the proceeds to the principal shall not extend or postpone the due date
<br />of the monthly payments which are referred to in Paragraph 2, or change the amount of such payments. Any excess insurance
<br />required to aU outstanding indebtedness under the Note and this Security Instrument shag i;e
<br />proceeds over an amount pay
<br />paid to the entity legally entitled thereto.
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<br />In the event of foreclosure (if .buts &amrity instrument or other transfer of title to the Property that extinguishes the
<br />indebtedness, all right, title and interc,t of Garrow"er fi and to insurance policies in force shall pass to the purchaser.
<br />S. Prem mi6mm, and Ilotenrapee ICE {due Lroperty, Leaseholds. Borrower shall not commit waste or destroy, damage cur
<br />4tiErstsotia[[v� 5arzae cite Property or allow the Property to deteriorate. reasonable wesr and tear excepted. Lender may inspect
<br />the pcaNrry if'r_C,e groperrl ins vacant or abandoned or tite loan is in' default. L:erider may take reasonable action to protect
<br />and grese6e, smctt acaac Jsr abandoned property. If this Security instrurnettt is (in a leasehold. Borrower shall comply with
<br />the provisions ra< :tl�te lease. if Borrower acquires fee titie'to the Property, the lea. elwld and fee title shall not be merged unless
<br />Lender agrees to, the merger in writing.
<br />6. Charges to Borrower arrd Protection of Lender's Rights in the Property. Borrower shall pay all governmental or municipal
<br />(.1m ges. fines and impositicnis that are not included in Paragraph.2. Borrower shall pay these obligations on time directly to
<br />t:ii�. �tntity which is owed the payment. If failure to pay would adversely affect Lea4o -'s interest in the Property,. upon Lender's
<br />request Borrower shall promptly furnish to Lender receipts evidencing these payments.
<br />If Borrower rails to male these payments or the payments required by Paragraph 2. or fails to perform any other covenants
<br />and agreements conmined;iri this Security Instrument. or there is a legal proceeding that may significantly affect Lender's rights
<br />in the Property (such ;ts a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may
<br />do and pay whatever is: neu:s,,;ary to protect the value of the Property and Lender's rights in the Property. including payment
<br />of taxes, hazard insur ncr: 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
<br />by this Security Instrument. These amounts shall bear interest from the date of disbursement, at the Notc rate. and at the
<br />option of 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
<br />condemnation or other taking of any part of the Property, or for conveyance in place of condemnation. are hereby assigned
<br />and shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and thi%
<br />Security Instrument. Lender shall apply such proceeds to the reduction of the indebtedness under the Note and this Security
<br />Instrument. first to any delinquent amounts applied In the order pro%ided in Paragraph ?, and then to prepayment of principal.
<br />Pate 2— a
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