|
200207218
<br />BORROWER COVENANTS that Borrower is lawftully 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 record Borrower
<br />warrants and will defend generally the tide to 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 Tate charges, an installment of any (u) taxes and special assessments levied or to be levied against the Property, (b)
<br />Icasehold payments or ground rents on the Property, and (c) premiums for insurance required by paragraph 4.
<br />Hach monthly installment for items (a), (b), and (c) shall equal one- twelfth of the annual amounts, as reasonably estimated
<br />by Lander, plus an amount sufficaul to maintain an additional balance of not 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 items (a), (b), and (c) before they become
<br />delinquent.
<br />II at any time the total of the payments 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 estimated
<br />amount of payments required to pay such items when due, and if payments on the Note are current, then Lender shall either
<br />refund tine excess over ore sixth of the estimated payments or credit die 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 Borrower for item (a), (b),
<br />of (d 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 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 «) be paid by Lender to the Secretary, or
<br />(it) a monthly charge instead of a mortgage insurance premium it 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 normal 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 one -
<br />twelf'th of one half percent of the outstanding principal balance due on the Note.
<br />II' Borrower tenders to Lender the full payment of all sums secured by this Security Instrument, Borrower's account shall
<br />be credited with the balance remaining for all installments for items (a), (b) and (c) and any mortgage insurance premium
<br />Installment that Lender has not become obligated m pay to the Secretary, and Lender shall promptly refund any excess funds to
<br />Borrower. 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 t and 2 shall be applied by Lender as follows:
<br />Fu st, to the mortgage Insurance premium to be paid by Lender to the Secretary ur to We monthly charge by the Secretary
<br />instead or the monthly mongegc insurance premium,
<br />Second, to any tuxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard insurance
<br />premiums, as required;
<br />"Thud, to interest due under the Note;
<br />Fourth, to amorltz mon of the principal of the Note;
<br />Fifth, to gate charges due under the Note.
<br />4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether now in
<br />existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which Lender requires
<br />instaanoc. This insurance shall be maintained in the amounts 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 Bonds to pre extent
<br />required by the Secretary. All insurance shall be carried with companies approved by Lender. 1'he insurance policies and any
<br />renewals shall be held by Lender and shall include loss payable clauses in favor of, and in a futon acceptable to Lender.
<br />In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not made
<br />promptly by Borrower. Loch insurance company concerned is hereby authorized and directed to make payment for such Toss
<br />directly to Leader, instead of to Bon cover 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 restoration ur repair
<br />of the damaged Property. Any application of the proceeds to the principal shall not extend or postpone the due date of the
<br />monthly puymcnts which are referred to in pungraph 2, or charge the amount of such payments. Any excess insurance
<br />proceeds over an amount requard to pay all outstanding indebtedness under the Note and this Security Instrumerh shall be paid
<br />to the eauty legally entitled thereto.
<br />IL P,"c 016
<br />
|