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<br />:93- :110877
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<br />1. Payment of Principal, Interest and Late Charge. Borrower shall pay when due the principal of. lInd interest on.
<br />the debt evidenced by the Note and late charges due under the Note.
<br />1. Monthly payments of Taxes, Insurance and Other Charges. Borrower shall include in each monthly payment.
<br />together with the principal and interest as set fonh in the Note and any late charges. an installment of any (a) taxes and
<br />special assessments levied or to be levied against the Propeny, (b) leasehold payments or ground rents on the Propeny. and
<br />(c) premiums for insurance required by Paragraph 4.
<br />Each monthly installment for items (a). (b) and (c) shall equal one-twelfth of the annual amounts. all reasonably
<br />estimated by Lender. plus an amount sufficient to maintain an additional balance of not more than one-sixth of the
<br />estimated amounts. The full annual amount for each item shall be accumulated by Lender within a period \:nding or.":
<br />month before an item would become delinquent. Lender shalll hold the amounts collected in trust to pay items (3), (b) and
<br />(c) before they become delinquent.
<br />If at any time the total of the paymen~s held by Lender for items (a). (b) and (c). together with the future monthly
<br />payments for such items payable to Lender prior to the due: dates of such items. exceeds by more than one-sixth the
<br />estimated amount of payments required to pay such items when due. and if payments on the Note are current. ahen Lender
<br />shall either refund the excess over one-sill.th of the estimnted payments or credit the excess over one-sixth of the e!ltimated
<br />payments to subsequent payments by Borrower, at the option of Borrower, If the total of the payments made by Borrower
<br />for item (a). (b), or (c) is insufficient to pay the item when dut". then Borrowc:r shall pay to Lender any amount 'necessary to
<br />make up the deficiency 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. In any year in which the Lender must pay a mortgage insurance premium to the Secretary. each monthly payment
<br />shall also include either: (i) an installment of the annual mortgage insurance premium to be paid by Lender to the
<br />Secretary, or (ii) a monthly charge instead of a mortgage insurance premium if this Security Instrument is held by the
<br />Secretary. Each monthly installment of the mongage insurance premium shall be in an amount sufficient to accumulate the
<br />full annual mortgage insurance premium with Lender one_ month prior to the date th.: full annual mortgage insurance
<br />premium is due to the Secretary; or if this Security Instp,lment is held by the Secretary, each monthly charge shall be in an
<br />amount equal to one-twelfth of one-half percent of the outstanding principal balance due on the Note.
<br />If Borrower tenders to Lender the full payment of all sums !lecured by this Security Instrument. Rorrowcr~'1 neeount
<br />shall be credited with the balance remaining for all installments for items (a). (b) and (c) and any mortgage insurance
<br />premium installment that Lender has not become obligated to pay to the Secretary, and Lender shull promptly refund uny
<br />excess funds to Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's
<br />account shall be credited with any balance remaining for all installments for items (a), (h) and (c).
<br />3. Application of Payments. All payments under Paragraphs I and 2 shall he applied by Lemler a,~ follows:
<br />FIRST, to the mortgage insurance premium to he paid hy Lender to the Secretary or to the monthly chargc hy the
<br />S~crctary instead of the monthly mortgage insurance premium;
<br />SECOND, to any taxes, special a'isessments, leasehold payments or ground rents, and fire. nood und other hazard
<br />insurance premiums. as reqL:ired;
<br />THiRD. to interest due under :he Note;
<br />FOURTII, to amortization of th.... prin....ip..l of the Note;
<br />FirTH, tu late charges oue under the Note.
<br />4. Fire, Flood and Other Hal..ard In!iurance. Borrower shall insure all improvements on the Property. whether now
<br />in existellce or subsequt:ntly erected, against any hazards, casualtics, and contingencies, including fire. for which Lender
<br />requires insurance. This insurance shall be muintained in the amounts and for the periods that Lender requires. Borrower
<br />shall also insure all improvements on lhe Property. whether now in existence or subsequently erccted, againslloss hy l100ds
<br />to the extent required by the Secretary. All insurance shall he carried with companies approved by Lender. The insumnce
<br />policics and any renewals shall be held by Lender and shall include loss payable clauses in favor of, and in a form
<br />acceptable tu. Lender.
<br />In the event of loss, Borrower shall give Lender immediate nut ice by mail. Lender may make proof of loss if not
<br />made promptly by Borrower. Each insurance company eoncemed is hereby authorized and directed to make payment for
<br />5uch loss directly to Lender, instead of to BorTower and to Lender jointly. Allor any part of the insumnce proceeds may he
<br />applied by Lender. at its option, either (a) \0 the reduction of the indehtedness under the Note :10<1 this Security Inslrument,
<br />first to any delinquent amounts applied in the order in Pamgraph 3, and then to prepayment of principal. or (h) III the
<br />restoration or repair of the damaged property. Any application of the proceeds to the principal shall not cxtend or postpone
<br />the due dale of the monthly payments which arc referred to in Paragraph 2, or chan~e Ihc amount of sHch payments, Any
<br />excess insurance proceeds uver an amount required to pay all outstanding indehtedness under the ~;'.i!;: and this Security
<br />Instrument shall be paid to the entity legally entitled therein.
<br />In the event of foreclosure uf this Security Instrument ur other transfer of title to the Property that ('xlingui:,hes the
<br />indebtedness. all right. title and interest of Borrower in and to insurance policies in forc(' shall pass tu the purchaser.
<br />5. OeclJpanq. Preservation. Maintenance and Protection of the Property; Uorrower's l.oan Applieutlon;
<br />Leaseholds. Borrower shall occupy, establish. and use th,~ Property as Borrowcr.s principal residence within siXly days
<br />after the execution of this Security Instrument and shall continue to occupy the Property as Borrower\ principal residence
<br />for at least one ye:!r after the date of occupancy, unless the Secretary ,',clennines t11is requirement will cause undue hardship
<br />for Borrower, or unless extenuating circumstances exist which art', heyond Borrower's control. Borrower shall notify
<br />Lenders l)f any extenuating circumstances. Borrower shall not commit waste or destroy, damage or substantially change
<br />the Property or allow the Property to deteriorate, reasonable wear and tear excepted. Lender may inspect the Property if the
<br />Property is vacant or abandoned or the loan is in default. Lender may take reasonable action to protect and preserve such
<br />vacant or abandoned Property. Borrower sha!! also be in default if Borrower, during the loan application process, gllve
<br />materially false or inaccurate infonnation or statements to Lender (or failed to provide Lender with any material
<br />information) in connection with the 101ln evidenced by the Note, including. but not limited to, representations concerning
<br />Borrower's occupancy of the Property as a principal residence. If this Security Instnllllent is on a leasehold. Borrower shall
<br />comply with the provisions of the Ie-ase. If Borrower aequil'es fee title to the Property, the leasehold nnd fee title shnll not
<br />be merged unless Lender agrees to the merger in writing.
<br />tl. Churgt"'l to Horrower and Protection of Lender's Rights In the Property. Borrower shall pay nil govemmcnllll
<br />or municipal charges. fine.'i and impositions that are not included in Pllragraph 2. Borrower shllll PIlY these (lbliglltions on
<br />time direclly to the entity which is owed the payment. If failure to pay would advl'rsely affect Lelldl~r's interest in lhe
<br />Propcrty, upon Lender's request Borruwer shall promptly furnish to Lcnder receipts evidencing these payments.
<br />If Borrower fails to make these payments or the payments required by Pllrugruph 2, or fails to perform j\ny ollll'r
<br />covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may signiJicnntly affect
<br />Lender's rights in the Propeny (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations),
<br />then Lender may di) and pay whatever is necessary to protect the value of the Property llOd Lender:~ rights in the Property,
<br />including payment of taxes, ha/.ard insurance and other items mentioned in Paragraph 2.
<br />Any amounts disbursed hy Lender under this Pamgraph shall hecnmc all additional debt of Borrower and he secured
<br />by this Security Instrument. These llmOlll1lS shall bear interest from the date of disbursement, at the Notel:tle, and al the
<br />option of Lender. shall be immediately due and payahle.
<br />7. Condemnation. The proceeds of arlY award or claim for damages. direct or consequential, in connection with anv
<br />condemnation or other takin~ of any part of the Pr~_perty, or for conveyance in place of condemnation, arc herehy assigne~1
<br />and shall he paid to Lender to the extcnt of the full amount of the indebtcdness that remains unpaid under the Note ,JIld this
<br />Security Instrument. Lender shall apply such proceed~ 10 Ihe reduc!ion of the indebtedness umler the Noll~ ,ll1d this Sel"llritv
<br />InstrUllll.:nt. firsl to any dclinqul.:nt amounts applied in the order provided in Paragraph :I. and then to prep:lymenl \;f
<br />principal. Any application of the proceeds 10 the principal shall not extend or postp.me the due date of the monthly
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<br />{f1tJ~~f' ~ o/-J I'(].i~t"d
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