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200207229
<br />BORROWER COVENANTS that Borrower is lawfully sailed of the elate hereby conveyed and has the right to
<br />nongage, grant and convey the Prone ry and chat the Property is unencumbered, except for encumbances of cancer. Borro scr
<br />wants and will defend generally the tide m the Property against all claims and demands, subject to any encumbrances of
<br />record,
<br />1. Payment of Principal, Interest and Late Charge. Borrower shall pay when due the principal of, and interest on, the
<br />debt evidenced by the Note and late 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 (It) coxes and special assessments levied or to he levied almost the Property, (b)
<br />leasehold payments or around rents nn the Property, and (c) premiuno for insurance required by paragraph 4
<br />Each monthly installment for items (a), (b), and (a) shall equal one twelfth of the annual amounts, as reasonably estimated
<br />by Lender, plus an amount suffdem to mainmin an additional balance of nil more than one sixth of the estimated amounts.
<br />The 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 Item (a), (b), and (c) before they become
<br />delinquent
<br />It at any time the total of the payments held by Lender for items (a). N). and (c), together with tie future monthly
<br />payments for such items payable to Lender material the due dales of ouch items, exceeds by more than ono-sixth the estimated
<br />amount of payments required to pay such bents when due, and if payments on the Note are current, then Lender shall either
<br />refund the excess over one sixth of the estimated payments of credit the excess a vet one . -sixth of the estimated payments to
<br />subsequent payments by Borrower, at the option of Borrower. It dm total of the payments made by Borrower far item (a), (b).
<br />or (c) is insufficient to pay the Item when due, then Bonowcr shall pay to Lender any amount narcoses to make up the
<br />delidaucy on or before disease the item becmncs due.
<br />As used in this Security Instrument, "Secretary' means the Secretary of Housing and Urban Development or his of her
<br />designee. In any year in which the Lander most pay a mortgage Insmaree prcm'mm to the Secretary, each momhly payment
<br />shall also Include either (i) an insadlntent of the annual mortgage Insurance premium to be paid by Lender to the Secretary_ or
<br />till a monthly charge instead of a mortgage insurance premium if this Security Instrument is held by the ferment Each
<br />uen Ell ly insmilitant of the treillage insurance premium shall be 'u amount sulHdent to accumulate the full annual
<br />In an emr
<br />nortgase insurance premium with Lender one month prior to the date the full annual mortgage inaul premium is due to
<br />the Secretary, or if this Security Instrument is held by the Satemry, each monthly charge shall be in an amount equal to one
<br />twelfth worse half percent of the outstanding principal balance due on the Note.
<br />If Borrower tenders m Lender the full payment of all sums secured by this Security Instrument, Borrower's account shall
<br />be credited with the balance re nsuniog far all Installments for damns (a), (b) and (c) and any mortgage In.smanec premium
<br />installment that Lender has an become obligated w pay to the Secretary, and Lendershall promptly refund any excess funds to
<br />Borrower. Inmediately prior to a foreclosure sale of the Property or its auptisiGOn by Lender, Borrower's account shall be
<br />credited with any balance remaining for all installments for items (a), (b), end (e).
<br />3. Application of Payments. All payments under paragraphs I and 2 shall beappltcd by Lender as follows:
<br />rrst to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by the Secretory
<br />Instead of themomhly trongage insurance premium,
<br />Second, to any taxes, special asssstrem.s, Iceschold payments or ground ounces, and fire, flood and other hntoad insurance
<br />pmmlures, as required;
<br />'phial, nI Interest due under the Note,
<br />Fourth, to amortization of the principal of the Note,
<br />Fifth, to late charges due order the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all ttrprovcmcns on the Property, whether now in
<br />existence or sulesequcmly erected, agannst any hazards, casualness and contingencies, including fire, for which I order requires
<br />Insumncc
<br />'f his Insurance shall be maintained in the amounts and for the periods that Lender requires Borrower shall also
<br />insure all y the Scmcnts tan the Property, whether now in existence tcam anies approved erected r. The loss ra floods m the extent
<br />required by the Secretary. All noun shall be can led with companies approved by Lcndcr. the insurance policies and any
<br />renewals shall be held by Lender and shall Include Ioss payable clauses in Loss of. and in a form acceptable to Lender.
<br />In the event tar lass, Bom>aer shall give Lender Immteladc notice by mail. Lender may male proof of less if not made
<br />promptly by Bnnowcr. Lich insurance company concerned is hereby authorized and directed to make payment for such loss
<br />directly to Lender, Instead of to Burrower 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 mducnon of the indebtedness under the Note and this .Security Instrument first to any
<br />delinquent dral applied in the order in paragraph 3, and than to prepayment of principal. or (b) to the restoration or repair
<br />of Iba damaged Property. Any application of the proceeds to the principal shall not extend to postpone the due date of the
<br />monthly payments which are referred to in pangraph 2, of change the amount of such payments- Any excess insurance
<br />proceeds over an amount required to pay all outstanding indebtedness under the Note arid this Security Instrument shall be paid
<br />to the entity legally entitled thereto.
<br />Psi, 2uf6
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