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<br />L lalytrat of Pndaelpal, Internet mud Ls" Charge. Borrows shat pay when due the principal of, and interest an the deer
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<br />evidenced by the Note and late charges due under the Note.
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<br />2. Nam* hymsse" of Tmxes, lmtteps" and Odwr CtttslV& Borrower shall include in each monthly payment. together with
<br />the principal and interest as set forth in the Note and any late charges. an installment of any (a) taxes and special assessments
<br />Property. (b) lessehold payments or ground rents on the Property. and (c) Premiums for
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<br />levied or to be kirkd against the
<br />insurance required by Paragraph 4.
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<br />Each monthly installment for item (a), (b) and (c) shad equal one-twelfth of the annual amounts, as reaaosnMly estimated by
<br />Lender, an amount sufficient to mbalance intain an additional balance of not more than one -sixth of the estimated amounts. The
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<br />plus
<br />full annual amount for each item shall be accumulated by Lender within a period ending one month before an item would
<br />wUeded in trust to pay items (a), (b) and (c) before they become delinquent,
<br />become delinquent. Lender shall hold the amounts
<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 />due dates of such items, exceeds by more than one -sixth the estimated amount of
<br />for such Items payable to Lender prior to the
<br />payments required to pay such items when due, and if payments on the Note are current, then Lender shall either refund the
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<br />excess over one -sixth of the estimated payments or credit the excess over one sixth of the rstiatated payments to subsequent
<br />by Borrower. at the option of Borrower. If the total of the payments made by Borrower for item (a). (b). or (c) is
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<br />payments
<br />insufficient to pay the item when due. then Borrower shall pay to Leader any amount necessary to make up the deficiency on or
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<br />before the date the item becomes due.
<br />••Secretary the Secretary of Housing and Urban Development or his or her
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<br />As used in this Security Instrument. mmes
<br />designee. Most Security Instruments Insured by the Secretary are insured under programs which require advance payment oft e
<br />is insured under a program which did not require advance
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<br />entire mortgage insurance premium. If this Security Instrument or was
<br />Payment of the entire mortgage insurance premium, then each monthly payment shall also include either: (I) an installment of the
<br />annual mortgage insurance prevalum to be paid by Lender to the Secretary, or (ii) a monthly charge instead of a mortgage
<br />insutastce premium if this Se. -unity Instrument is held by the Secretary. Each monthly installment of the mortgage insurance
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<br />premium sW be in an amount sufficient to accumulate the full annual mortgage Insurance premium with Lender one month
<br />insurance is due to the Secretary, or if this Security Instrument is held by the
<br />Prior to The dwty the full annual mortgage premium
<br />Secretary, eadh monthly charge shall be ir. an amount equal to one- ttrelfth of one -half percent o7 the outstanding principal
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<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 sham be
<br />insurance
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<br />credited with the balance remaining for all inswllrpents for Items (a), (b) and (ch and any mortgage pmmtum
<br />installment that Lender has not become obligated to.pay to the Secretary, and Lender shag promptly refund say excess sands to
<br />Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender. Borrower's a ccount shall be
<br />credited with any balance remaining for all iastallmenIs for items (a), (b) and (c).
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<br />3. Application of Payeseets. AU payments under paragraphs 1 and 2 shall be applied by Lender as follows:
<br />IR,Q. 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 prcndurat, u," narrow:, paW ft e= a ^raga s insurance premium when this
<br />Security Instrument was signed;
<br />SECOND, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard insurance
<br />premiums, as required;
<br />THIR , to interest due under the Note;
<br />VURTH, to amortization of the principal of the Note;
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<br />FIFTH, to late charges due under the Note.
<br />4, Firs, Flood mad Otbr Hazard lasnreace. 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 amounts and for the periods that Lender requires. Borrower shall also insure all
<br />in or subsequently erected, against loss by floods to the extent required by
<br />improvements on the Property, whether now existence
<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.
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<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 />is hereby authorized and directed to make payment for such loss directly to
<br />ly by Borrower. Each insurance company concerned
<br />Lender, instead of to Borrower and to Lender jointly. AU 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, first to any delinquent
<br />in Paragraph 3, and then to prepayment of principal, or (b) to the restoration or repair of the
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<br />amounts applied in the order
<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 payments. Any excess insurance proceeds over an
<br />outstanding indebtedness under the Note and this Security Instrument shall be paid to the entity legal.
<br />amount required to pay all
<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.
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<br />s. proservadon sod Nalateswe 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
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<br />the property if the property Is vacant or abandoned or the loan is in default. Lender may take reasonable action to protect and
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<br />preserve such vacant or abandoned property. If this Security Instrument is on a leasehold, Borrower shall comply with the provi-
<br />lions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title shall not be merged unless Lender
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<br />agrees to the merger in writing.
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<br />6. Charges to Borrower sad Protectloa of Lender's Rlgbts in the Property. Borrower shall pay all governmental or municipal
<br />included in Paragraph 2. Borrower shall pay these obligations on time directly to the
<br />charges, Ones and impositions that are not
<br />entity which is owed the payment. If failure to pay would adversely affect Lender's in {n the Property. upon Lender's re•
<br />quest Borrower shall promptly furnish to Lender receipts evidencing these payments.
<br />If Borrower fails to make these payments or the payments required by Paragraph 2, or fails 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
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<br />the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do and
<br />the value of the Property and Lender's rights in the Property, including payment of taxes.
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<br />pay whatever is necessary to protect
<br />hazard insurance and other items mentioned in Paragraph 2.
<br />Any amounts disbursed by leader under this Paragraph shall become an adattionai aebt of norrower anu oc wcumu wy t="ui
<br />Security Instrument. These amounts shall bear interest from the date of disburwrient, at the Note rate. and at the option of
<br />Lender, shall be immediwely due and payable.
<br />7. Condeauatba. The proceeds of any award or claim for damages, direct or consequential. in connection with any condem-
<br />or taking of any pan of the Property, or for conveyance to place of condemnation, are hereby assigned and shall be
<br />nation other
<br />paid to Leader to the extent of the 1 all amount of the indebtedness that remains unpaid under the Note and this Security Instru-
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<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 theta to prepayment of principal. Any application of
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<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 />debredness under the Note and this Security Instrument shall be paid to the entity legally entitled thereto.
<br />g. Pea. Lender may collect fees and charges authorized by the Secretary.
<br />Part 2 of
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