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<br />Each monthly installment for
<br />I teivia llar. Iki 9 and ici shall equal one - Twelfth of the annual amounts, as reasonably estimated
<br />by Lender, plus an amount sufficient to maintain an additional balance of not more than vne•sixth of the estimated aniounts•
<br />Lender within a period ending one month before an item would
<br />The full annual amount for each item shall he f-ccumulated by clinquent.
<br />become delinquent. Lender shall hold the amounts collected in trust 10 pay items ja). lb). md (c) before they become d
<br />If at any time the total of the payments held by Leader for items (a), (b). and W. together with the Put ure 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, a, the option of Borrower. If the total of the payments made by Borrower for item (a). (b), of (c) 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 Instruments 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 inot 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 WAIM111911t is held by the Secretary. Each monthly installment of bate MW 1889c 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 Secretary, each monthly charge shag be in an amount equal toov*twelfth of one-half percent of the outstanding principal
<br />balance due on the Note.
<br />If Borrower tenders to Leader the full payment of all sums secured by this Security Instrument, Borrower's account shall
<br />be credited with the balance remaining for all installments fkAr 1,vems (a), (b), and (c) and any mortgage insurance premium
<br />installment that Lender has not become obligated to pay to ache 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, Buqr0wef's account shall
<br />be credited with any balance remaining for ah 3n.nallments for items (a), (b). and (c).
<br />3. Application of Payments. All payments under paragraphs I and 2 shall be applied by Lender as follows:
<br />First, to the mortgage insurance premium to be paid by Lender to the Secretary PT -to the monthly charge by the Secretary
<br />instead of the monthly mortgage insurance premium, unless Borrower paid ft: entire mortgage insurance premium when this
<br />Security Instrument mas signed;
<br />Second, to apy rzqi .( fire, flood and other hazard insurance
<br />�s. rpecial assessments. leasehold payments or ground rents, and
<br />premiums. as required;
<br />Wto interest due under the Note;
<br />Third. to amortization p• t s principal of the Note;
<br />Fifth, to late charges due under the Now.
<br />4. Fire, Flood amd Other Hazard Insurance, Borrower shall insure all improvements on the property. whether now in
<br />existence or subsequently erected, against any hazards. casualties, and contingencies, including fire, 19,r which Lender requires
<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 floods to the extent
<br />required by the Secretary. All insurance shall be carried with companies approved by Lender. The insurance policies and any
<br />renewals shall 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
<br />promptly by Borrower. Each insurance company concerned Is hereby authorized and directed to make payment for such loss
<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 indebtedness 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 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 />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 forCCIOSUTC of this Security Instrument or other transfer of title to the Property that extinguishes the
<br />indebtedness, all right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
<br />5. Preservation stud Maintenance of The Property. Lesseholds. Borrower shall not commit waste or destro%, 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 10 Protect
<br />and preserve such vacant or abandoned property. If this Security Instrument is on a leaschold. DorTower shall comply with
<br />the provisions of the lease. If Borrower aCqUiTCS fee title to the Property, the leasehold and fee title stall not be merged unless
<br />Leader agrees to the merger in writing.
<br />6. Charges to Borrower and Protection of Lender's Rights in the Property. Borrower shall pay all governmental or municipal
<br />charges, fines and impositions that are not includzd in Paragraph 2. Borrower shall pay these obligations on time directly to
<br />theentity which iso%itcl the payment. If failure '.,- Pay would adversely affect Lender's interest in albe iProperty, upon Lender's
<br />request Borrower shall promptly famish to Lender receipts evidencing these payments.
<br />If Borrower fails to make ites.- payments or the payments required by Paragraph 2, or fails to perform any other covenants
<br />......... th~ is n Ioual tirtweedina that may sianificantly affect Lender's rights
<br />and agrecnicW516usia4l u lie to— —,-- -1, - 1- R. _V. . -
<br />in the Property (itich as a proceeding in bankruptcy, for condemnation of to enforce laws or tegula tions). then Lender may
<br />do and pay whatever is necessary to protect the %alue of the Property and Lender', rights in the Prorterty, including payment
<br />of taxes, hazard insurance and other items mentioned in Paragraph 2.
<br />Any amounts disbursed by Lender tinder this Paragraph ,hall become an adfirtonal debt of Borrower and he secured
<br />by this Security Instrument. Jhm- amounts shall bear interest from the date of disbursement. at I he Note rate, and at the
<br />option of Lender, .hall be irrimcdarely dw and payable.
<br />7. CowWmastion. The proceeds of any award or claim for damage-., direct let 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 remain unpaid under the Note and this
<br />Security Instrument. Lender shall apply such proceeds to the reduction tit the indebtedness under the Note and this Security
<br />Instrument, first to any delinquent amounts applied in the order provided in Paragraph 3, and then to prepaynicrit of principal.
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