HomeMy WebLinkAbout2211 Earh monthly installment t~or items (a), (b), and (c) shail eyual ane-tweif'th of the annuai amounts, as reason~ibly cstimated
1~~ Lenaer, plus ar, amount sufficient [o maintain an additional balance of not ~nore than c~ne-sixth of the estimated amounts.
f he futl annual amount for each item shall be accumulated by Lender ~~•ithin a period ending one month before an item H~ould
herome delinyuent. 1_ender shaU hold the amounts collected in trust to pay items (a), (b), and (c) before they become delinquent.
If at any time tt~e total of t~e papments held by Lender for items (a), (b), and (c), tugether with the future monthly payments
~ur surh items payable to Lender prior to the due dates of such items, exceeds by more than une-sixth the estimated amount
~~t pa~~r~ents reyuired to pay such items when due, and if payments on the Note are current, then Lender shall either refund
the exress o~~er one-sixth of the estimat~d payments or credit the excess over one-sixth of the estimated payments to subsequent
{~ayments by Borrower, at the option of Borrower. If the total of the payments made by Borrow•er for item (a), (b), or (c)
i~ insufficient to pay the item k~hen due, then Borrower shall pay to Lender any amount neccssary to make up the de~ciency
on or before the date the item becomes due.
As used in this Security tnstrument, "Secretary" means the Secretary of Housing and Urban Development or his or her
clesignee. htost Security Instruments insured by the Secretary are insured under programs w~hich require advance payment of
the entire mortgage insurance premium. If this Security Instrument is or was insured under a program which did not require
ad~~ance payment of the entire mortgage insurance premium, then each monthly payment shall also include either: (i) an installrnent
of the annual mortgage insurance premium to be paid by Lender to the Secretary, or (ii) a monthty charge instead of a mortgage
insurance premium if this Security Instrument is held by the Secretary. Each monthly installment of the mortgage insurance
~remium shalt be in an amount sufficient to accumulate the full annua! mortgage insurance premium ~~~ith Lender one month
prior to the date the full annual mortgage insurance premium is due to the Secretary, or if' this Security Instrument is held
by~ the Secretary, each monthly charge shall be in an amount equal to one-twelfth of one-half percent of the outstanding principal
balance due on the Note.
If Borrov?•er tenders to Lender the full payment of all sums secured by this Security Instrument, Borrower's account shall
be credited with the balance remaining for all installments for items (a), (b), and (c) and any mortgage insurance premium
installment that Lender has not become obligated to pay to the Secretary, and Lender shall promptty refund any excess funds
to Borrower. [mmediatety prior to a forectosure sale of the Property or its acquisition by Lender, Borrower's account shall
be credited with any balance remaining for a!! installments for items (a), (b), and (c).
3. Application of Payments. All payments under paragraphs 1 and 2 shall be applied by Lender as follows:
First, to the mortgage insurance premium to be paid by Lender to the Secretary or to the monthiy charge by the Secretary
instead of the monthly mortgage insurance premium, unless Borrower paid the entire mortgage insurance premium when this
~ecurity instrument was sigrted;
Second, to any taxes, special assessments, leasehold payments or ground rents, and fire, flood and other hazard insurance
premiums, as required; `
Third, to interest due under the Note;
Fourth, to amortization of the principal of the IVote;
Fifth, to late charges due under the Note.
4. Fire, Flood an~ Other Hazard Insurance. Borrower shall insure all improvements on the Property, whether now in
e~istence or subsequently erected, against any hazards, casualties, and eontingencies, including fire, for which Lender requires
insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. Borrower shall also
insure all improvements on the Property, whether now in existence or subsequenily erected, against loss by floods to the extent
required by the Secretary. All insurance shall be carried with companies approved by Lender. The insurance policies and any
renewals shall be held by Lender and shall include loss payable clauses in favor of, and in a form acceptabte to, Lender.
In the event of lass, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not made
promptly by Borrower. Each insurance company concerned is hereby authorized and directed to make payment for such loss
directly to Lender, instead of to Borrower and to Lender jointly. Ali or any pari of the insurance proceeds may be applied
by Lender, at its option, either (a) to the red~ction of the indebtedness under the Note and this Security Instrument, first to
any delinquent amounts applied in the order in Paragraph 3, and then to prepayment of principal, or (b) to the restoration
or repair of the damaged property. Any application of the proceeds to the principal shall not extend or postpone the due date
of the monthly payments which are referred to in Paragraph 2, or change the amount of such payments. Any excess insurance
proceeds over an amount required to pay all outstanding indebtedness under the Note and this Security Instrument shall be
paid to the entity legally entitled thereto.
In the event of foreclosure of this Security Instrument or other transfer of title to the Property that extinguishes the
indebtedness, ail right, title and interest of Borrower in and to insurance policies in force shall pass to the purchaser.
5. Preservation and Maintenance of ihe Propehy, I.easeholds. Borrower shali not commit waste or destroy, damage or
substantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted. Lender may inspect
the property if the property is vacant or abandoned or the loan is in default. Lender may take reasonable action to protect
and preserve such vacant or abandoned property. If this Security Instrument is on a leasehold, Borrower shall comply with
the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title shal! not be merged unless
Lender agrees to the merger in writing.
6. Charges to Borrower and Protection of Lender's Rights in the Property. Borrower shall pay all governmental or municipal
charges, ~nes and impositions that are not included in Paragraph 2. Borrower shall pay these obligations on time directiy to
the entity which is owed the payment. If failure to pay would adversely affect Lender's interest in the Property, upon Lender's
request Borrower shall promptly furnish to Lender receipts evidencing these payments.
If Borrower fails to make these payments or the payments required by Paragraph 2, or fails to perform any oiher covenants
and agreements contained in this Security Instrument, or there is a legal praceeding that may signi~cantly affect Lender's rights
in the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws ar regutations), then Lender may
do and pay whatever is necessary to protect the value of the Property and Lender's rights in ihe Property, including payment
of taxes, hazard insurance and other items mentioned in Paragraph 2.
Any amounts disbursed by Lender under this Paragraph shall become an additional debt of Borrower and be secured
by this Security Instrument. These amounts shall bear interest from the date af disbursement, at the Note rate, and at the
option of Lender, shall be immediately due and payable. -
7. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in conneetion with any
condemnation or other taking of any part of the Property, or for conveyance in ptace of condemnation, are hereby assigned
and shal( be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this
Security Instrurnent. Lender shall apply such proceeds to the reduction of the indebtedness under the Note and this Security
Instrument. first ta any delinquent amounts applied in the order provided in Paragraph 3, and then to prepayment of principal.
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