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<br />1. Payne at of Pnccipal, latseest tend 1;.ata Chw a. 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 />_• Moatfdy Pttymats of Taste, Ittattrassee sad Outer Chtarges. Borrower shall include in each monthly payment, together with an [Mod oor�tbellevied against the Property, f (b) leasehold late payments oar ground rents on the Property and special
<br />c) premiums efor
<br />insurance required by Paragraph 4.
<br />Each monthly installment for items (a), (b) and (c) shall equal one - twelfth of the annual amounts, as reasonably estimated by
<br />Lender, plus 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 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 />If 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 />payment required to pay such items when due, and if payments on the Note are current, then Lender 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 />iris fu ficient to Borrower. y the item when option
<br />ue. then Borrower shall pay to of the Leader any payments
<br />arno bnecesssary to make up the defriency on or
<br />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 the
<br />entire mortgage insurance premium. If this Security Instrument is or was insured under a program which did not require advance
<br />payment of the entire mortgage insurance premium, then each monthly payment shall also include either: (i) an installment of the
<br />annual mortgage insu riume premium to be paid by Lender to the Secretary. or (iiA a monthly charge instead of a mortgage
<br />insurance premium if this Security Instrument is held by the Secrnary. Each monthly instaftert of the mortgage insurance
<br />premiurr shall be in an amount sufficient to accumulate the full annual mortgage insurance premium with Lender one moms
<br />prior to the date the full 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 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 by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b) and (c).
<br />3. Appilesdon of Payments. All payment under paragraphs 1 and 2 shall be applied by Lender as follows:
<br />FIRST, to the mortgage insurance premium to be paid by Lender 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 />SECOND, to any taxes, special assessment. leasehold payment or ground rent, and fire. flood and other hazard insurance
<br />premiums, as required;
<br />TFl1ItD, to interest due under the Note;
<br />MLitt , to amortization of the principal of the Note;
<br />FIFTH, to late charges due under the Note.
<br />4. Fite. Flood and Odor Hazard lasarsoce. 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 maintained in the amount and for the periods that Lender requires. 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, 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 pan 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, first to any delinquent
<br />amounts applied in the order in Paragraph 3, and then to prepayment of principal, or (b) to the restoration rr 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 ate 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 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 right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
<br />S. Ptesetrradon and Malater tusce of the Property, Leaseholds. Borrower shall not commit waste or destroy, 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 to protect and
<br />preserve such vacant or abandoned property. If this Security instrument is on a leasehold, Borrower shall compti with the provi-
<br />sions of the lease. I? Borrower acquires fee title to the Property, the leasehold arts `ec tide shall not be merges: unless Lender
<br />agrees to the merges in writing.
<br />6. Cbarges to Borrower and Protection of Lender's Itlgbu in tee Property. Borrower shalt pa;. •a:i governmental or municipal
<br />charges, fines and impositions that are not included in Paragraph 2. Borrower shalt pay these eb,;gations on time directly to the
<br />entity which is owed Ine payment. If failure to pay would adversely affect Lendec's interest to the Property. upon Lender's re-
<br />quest Borrower ilea:.: '-raptly furnish to Lender receipts evidencing these payments.
<br />If Borrower fails to ^axe these payments or the payments required by Paragraph 2, or fails to perform any other covenantf and
<br />agreement contained in t).is Security Instrument, or there is a legal proceeding that may significantly affect Lender's npjtts or.
<br />the Property (such ns a proceeding in bankruptcy for condemnation or to enforce laws or regutartons ). then Lender may do seal
<br />pay whatever is necessary to protect the value of the Property and Lender's fights to the Property. including payment of rants.
<br />hazard insurance and other items mentioned in Paragraph 2.
<br />. _.. ___.._....,:..,.....�.1 t.., I.n,rw. „n.i�r ,hie Pataoranh shall herome an addmonal 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. Car /ea>aosiaa. The proceeds of arty award or claim for damages, direct or consequential, in connection with any condem-
<br />narion or other taking of any part of the Proporv. or for conveyance in place of condemnation. are hereby assigned and shall be
<br />paid to Lender to the extent of the lull amount of the indebtedness that remains unpaid under the Note and this Security Instru-
<br />ment. Lender 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 to
<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 />g. Fees. Lender may collect fees and charges authorized by the Secretary.
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