|
200206013
<br />BORROWER COVENANTS that Borrower is lawfully seized of the estate hereby conveyed and has the right to
<br />mortgage, grant and convey the Property and that the Property is unencumbered, except for encumbrances of r�ud. Borrower
<br />warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of
<br />record.
<br />1. Payment or Principal, Interest and Late Charge. Borrower shall pay when due the principal of, and interest tin, the
<br />debt evidenced by the Note and lace charges due under the Note. 2. Monthly Payments of Taxes, Insurance and Other
<br />Charges. Borrower shall include in each monthly payment, together with the principal and interest as set forth in the Note and
<br />any late charges, an installment of any (a) taxes and special assessments levied or to be levied against the Property, (b)
<br />leasehold payments or ground rents on the Property, and (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, as reasonably estimated
<br />by Leader, plus an amount sufficient to maintain an additional balance of not more than one sixth of the estimated amounts.
<br />'Ihe 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 collcced in trust to pay items (a), (b), and (e) before they become
<br />delinquent.
<br />If at any time the total of the payments held by Lender for items (a), (h), 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 estimated
<br />amount of payments required to pay such items when due, and if payments tin the Note are current, then lender shall either
<br />refund the excess over one-sixth of the estimated payments or credit the excess over one -sixth of the estimated payments to
<br />subsequent payments by Borrower, at the option of Borrower If the total of the payments made by Burrower for item (a), (b).
<br />or re) is insufficient to pay the item when due, then Borrower shall pay to Lender any amount necessary to make up the
<br />deficiency on or Incline 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 Lcndcr 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 he paid by Lender to the Secretary, or
<br />(ii) a monthly charge instead of a mortgage insurance premium if this Security Instrument is held by the Secretary. Each
<br />monthly installment of the mortgage insurance premium shall be in an amount sufficient to accumulate the full annual
<br />mortgage insurance premium with Lender one month prior to the date the full annual mortgage insurance premium is due to
<br />the Secretary, or if this Security instrument is held by the Secretary, each monthly charge shall be in an amount equal to oni
<br />twelfth of oni percent of the outstanding principal balance due on the Nam.
<br />If Borrower tenders to Lender the full payment of all sums secured by this Security Instrument. Borrower's account Shall
<br />he credited with the balance remaining for all installments for items (a), (b) and (c) and any mortgage insurance premium
<br />installment [flat Lendet has not become obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to
<br />Borrowcr. 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. Application of Payments. All payments under paragraphs I and 2 Shall be applied by Lender as follows!
<br />I ost 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;
<br />Second. to any taxes', special assessments, leasehold payments or ground rents, and fire, flood and other hazard insurance
<br />premiums, as required;
<br />Third, to interest due under the Note;
<br />Fourth, to amortization of the principal of the Note,
<br />Pltth, to late charges due under the Note.
<br />4, Fire, Flood and Other Hazard Insurance. Borrowcr Shall insure all improvements on the Property, whether now in
<br />existence or subsequently erected, against any hazards, casualties, and aufingencles, including fire, for which Lcndcr requires
<br />insurance This insurance shall be maintained in the uvounts 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 lass payable clauses in favor of, and in a form acceptable to Lender.
<br />In the event of loss, Bor ewer 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 fur 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 by
<br />Lender, at its option, either (a) to the reduction of the indebtedness under the Note and this Security Instrument, first to any
<br />delinquent amounts applied in the order in paragraph 3, and then to prepayment of principal, or (b) to the rcetnration or repair
<br />of the damaged Property - Any application of the proceeds to the principal shall not extend or postpone the due date oC the
<br />monthly payments which are referred to in paragraph 2, or change the amount of such payments. Any excess insurance
<br />pmceuls over an amount ruluired to pay all outstanding indebtedness under the Note and this Security Instrument shall be paid
<br />to the amity legally entitled thereon.
<br />oa'uunee P., 2 of 6
<br />rn unxex.vax ld /ii /3400
<br />
|