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<br />1. Irayeasat of IMaeyal, low" W Lab Claim. Norrowsr do pay when due the principal of. and Interest on, the debt
<br />evidenced by the Nat and last charges due under the Note.
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<br />L Monthly !ra to of Taos, lasoranes and Olhtr CMarges. Borrower shall include in each monthly payment. together with
<br />Interest as sal forth in the Note and any late charges, an installment of any (a) taxes and special assessments
<br />the principal
<br />lavled or to be laled against the Property, (b) lasehold payments or ground rents on the Property, and (c) premiums for
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<br />insurance requlrt d 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 />balance of not more then one -sixth of the estimated amounts. The
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<br />Lender, plus an amount sufficient to malnt n an additional
<br />full annual amount for each Item shall be accumulated by Lender within a period ending one month before an item would
<br />in trust to pay items lab (b) and (c) before they become delinquent.
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<br />become delinquent. Lender shall hold the amounts collected
<br />If any time the total of the payments held by Lender for items (a), (b). and (c), together with the future monthly payments
<br />at
<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 />due, if on the Note are current, then Leader shall either refund the
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<br />payments required to pay such items when and payments
<br />excess over one -sixth of the estimated payments or credit the excess over one-sixth of the estimated) payments to subsequent
<br />excess
<br />If the total of the payments made by Borrower for Hem (a). (b). or (c) is
<br />ts by Borrower. at the option of Borrower.
<br />imufficlent to pay the item when due, rhea Borrower shall pay to Lender say amount necessary to make up the deficiency on or
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<br />before the date the item becomes due.
<br />before a
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<br />used this Security Instrument, "Secretary" means the Secretary of Housing and Urban Development or his or her
<br />insured under which require advance payment of the
<br />designee. Most Security instruments insured by the Secretary are programs
<br />entire mortgage insurance premium. If this Security Instrument Is or was insured under a program which did not require advance
<br />also include either: (i1 an installment of the
<br />payment of the entire mortgage insurance premium, then each monthly payment shall
<br />mortgage insurance premium to be paid by Lender to the Secretary, ar (n) a monthly charge instead of a mortgage
<br />„'.
<br />annual
<br />Insurance premium li this Security Inatnutrtent ls held by the Secretary . Each monthly installment of the mortgage insurance
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<br />the full annual mortgage insurance premium with Lender one month
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<br />premium :hall be in amount sufficient to accumulate
<br />prior to the date the full aortas] mortgage insurance premium is due to the Secretary, or if Phis Security Instrument is held by the
<br />-halt of the outstanding principal
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<br />Secretary, each monthly charge shall be In an amount equal to one - twelfth of one percent
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<br />balance due on the Note.
<br />If Borrower tenders to Lender the full payment of all suns secured by this Security Instrument. Borrower's account shall be
<br />for items (c) and any mortgage insurance premium
<br />credited with the balance remaining for all installments (a), (b) and
<br />Installment that Lender has not become obligated to pay to the Secretary, and Lender Shall promptly refund any excess funds to
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<br />Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender. Borrower's account shall be
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<br />credited with any balance remaining for all installments for items (a), (b) and (c).
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<br />3. Application of Payments. AB payments under paragraphs 1 and 2 shall be applied by Lender as follows:
<br />gj$�T. to the mortgage iruwaaca premium to be paid by Lender to the Seattat , or to the monthly charge by the Secretary
<br />this
<br />instead of the monthly mortgage insurance premium, unless Borrower paid the entire mortgage insurance premium when
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<br />Security Instrument was signed;
<br />SECON . to any taxa, special assessments, leasehold payments oz ground renu, anal fire, stood and other hazard insurance
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<br />premiums, as required;
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<br />THI , to interest due under the Note;
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<br />FOURTH• to amortization of the principal of the Note;
<br />. to late charges due under the Note.
<br />4. Fine. blood acrd otter Hazard Insaraace. Borrower shall insure an 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 />for the that Lender requires. Borrower shall also insure all
<br />This insurance shall be maintained in the amounts and periods
<br />improvements on the Property, whether now in existence or subsequently erected, against loss by floods to the extent required by
<br />The insurance and any renewals shall
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<br />the Secretary. AB insurance shall be carried with companies approved by Lender. policies
<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 ii 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. 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, first to any delinquent
<br />am in Paragraph 3, and then to prepayment of principal. or (b) to the restoration or repair of the
<br />ounts applied in the order
<br />of the to the principal shall not extend or postpone the due date of the monthly
<br />damaged properly. Any application proceeds
<br />payments which are referred to in Paragraph 2, or change the amount of etch payments. Any excess insurance proceeds over an
<br />legal
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<br />amount required to pay all outstanding Indebtedness under the Note and this Security Instrument shall be paid to the entity -
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<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
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<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. Preservation and Ma ace latena of the Property. Leasebolds. Borrower shall not commit waste or destroy, damage or
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<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
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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-
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<br />slots 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. CYarges to Borrower and Protection of Lender's Rights 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
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<br />charges, fines and impositions that are not
<br />entity which is owed the payment. If failure to pay would adversely affect Lender's interest in 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
<br />the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do and
<br />pay whatever is necessary to protect the value of the Property nod Lender's rights in the Property, including payment of taxes,
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<br />. hazard insurancc ant uinci ucuS udu.u. -w
<br />Any amounts disbursed by lender under this Paragraph shall become an additional debt of Borrower and be secured by tho
<br />Security Instrument. These amounts shall bear interest from the date of disbursement. at the Notx rase. and at the option of
<br />Lender, shall be immediately due and payable.
<br />7. Condemntios. The proceeds of any award or claim for damages, ditect or consequeneW. in ca�rrec::en with at a to all be
<br />nation or other taking of any part of the Property, or for conveyance in place of condemnation. are tt-ety assigned ants saran be
<br />paid to Leader to the extent of the full amount of the Indebtedness that remains unpaid under the Nc•:x and this Security Instru-
<br />meat. Leader shall apply such proceeds to the reduction of the indebtedrness under the Note and this :Seca: i :y Instrument, firs to
<br />any delinqu,ast amounts applied in the order provided in Paragraph 1. and then to prepayment of principal. Any application of
<br />the proceeds to the principal shall not extend or aostpacit the due dace of the monthly payments, which are referred to in
<br />Paragraph 2, or change rite 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. Fes. Lender may collect fees and charges authorized by the Secretary.
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