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<br />Loan No.
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<br />TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, rights,
<br />appurtenances, rents, royalties, mineral, oil and gas rights and profits, water rights and stock and all fixtures now or
<br />hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of
<br />the foregoing is referred to in this Security Instrument as the "Property."
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<br />200804690
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<br />"
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<br />BORR9WER COVENANTS that Borrower is lawfully seized of the estate hereby conveyed and has the right to
<br />grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower
<br />warrants and will defend generally the title to the Property against all claims and demands, subject to any
<br />encumbrances of record.
<br />
<br />THIS SECURITY INSTRUMENT conbines uniform covenants for national use and non-uniform covenants with
<br />limited variations by jurisdiction to constitute a uniform security instrument covering real property.
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<br />Borrower and Lender covenant and agree as follows:
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<br />UNIFORM COVENANTS.
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<br />1. Payment of Principal, Interest and Late Charge. Borrower shall pay when due the principal of. and interest
<br />on, the debt evidenced by the Note and late charges due under the Note.
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<br />2. Monthly Payments of Taxes, Insurance and Other Charges. Borrower shall include in each monthly
<br />payment, together with the principal and interest as set forth in the Note and any late charges, a sum for (a) taxes and
<br />special assessments levied or to be levied against the Property, (b) leasehold payments or ground rents on the
<br />Property, and (c) premiums for insurance required by Paragraph 4. In any year in which the Lender must pay a
<br />mortgage insurance premium to the Secretary of Housing and Urban Development ("Secretary"), or in any year in
<br />which such premium would have been required if Lender still held the Security Instrument, each monthly payment shall
<br />also include either; (i) a sum for the annual mortgage insurance premium to be paid by Lender to the Secretary, or (ii) a
<br />monthly charge instead of a mortgage insurance premium if this Security Instrument is held by the Secretary, in a
<br />reasonable amount to be determined by the Secretary. Except for the monthly charge by the Secretary, these items
<br />are called "Escrow Items. and the sums paid to Lender are called "Escrow Funds."
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<br />Lender may, at any time, collect and hold amounts for Escrow Items in an aggregate amount not to exceed the
<br />maximum amount that may be required for Borrower's escrow account under the Real Estate Settlement Procedures
<br />Act of 1974, 12 U.S.C. 2601 et seQ. and implementing regulations, 24 CFR Part 3500, as they may be amended from
<br />time to time ("RESPA"), except that the cushion or reserve permitted by RESPA for unanticipated disbursements or
<br />disbursements before the Borrower's payments are available in the account may not be based on amounts due for the
<br />mortgage insurance premium.
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<br />If the amounts held by Lender for Escrow Items exceed the amounts permitted to be held by RESPA, Lender shall
<br />account to Borrower for the excess funds as required by RESPA. If the amounts of funds held by Lender at any time
<br />are not sufficient to pay the Escrow Items when due, Lender may notify the Borrower and require Borrower to make up
<br />the shortage as permitted by RESPA.
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<br />The Escrow Funds are pledged as additional security for all sums secured by this Security Instrument. If Borrower
<br />tenders to Lender the full payment of all such sums, Borrower's account shall be credited with the balance remaining
<br />for all installment items (a), (b), and (c) and any mortgage insurance premium installment that Lender has not become
<br />obligated to pay to the Secretary, and Lender shall promptly refund any excess funds to Borrower. Immediately prior
<br />to a foreclosure sale of the Property or its acquistion by Lender, Borrower's account shall be credited with any balance
<br />remaining for all installments for items (a), (b), and (c).
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<br />3. Application of Payments. All payments under Paragraphs 1 and 2 shall be applied by Lender as follows:
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<br />FIRST, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthly charge by the
<br />Secretary 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
<br />insurance premiums, as required;
<br />THIRD. to interest due under the Note;
<br />FOURTH, to amortization of the principal of the Note; and
<br />FIFTH. to late charges due under the Note.
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<br />4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether
<br />now in existence or subsequently erected, against any hazards, casualties, and contingencies, including fire, for which
<br />Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires.
<br />Borrower shall also insure all improvements on the Property, whether now in existence or subsequently erected,
<br />against loss by floods to the extent required by the Secretary. All insurance shall be carried with companies approve~
<br />by Lender. The insurance policies and any renewals shall be held by Lender and shall include loss payable clauses In
<br />favor of, and in a form acceptable to, Lender.
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<br />NE FHA DOT 1/96 1/96
<br />Page 2 of 6
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