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HomeMy WebLinkAbout1272 E:arh monthly installmcnt i~or items (a), (b), and (r) shall equal one-tHelfth of the annual amounts, as reasonaoly estimated b~• Lender, plus an amount sufficient to maintain an additional balanre of not more than c~ne-sixth of the estimated amounts. i h~ futi ani~uat a~i~~unt f~~r ~ach itcro shali be accun~ufated by Lriider wittiiii a periud enJing une ii~uiitt~ urfu~r an itrm wuut~l become delinquent. Lender shall hold the amounts collected in trust ta pay items (a), (b), and (c) before they become delinquent. It at any time the total of the pa~~ments held by Lender for items (a), (b), a~id (c), together with the future monthly payments Cor such items payable to Lender prior eo the due dates of such items, exceeds by more than one-sixth the estimated amount c~t payments required to pay such items when due, and if payments on the Note are current, then Lender shall either refund ihe excess over one-sixth of the estimated payments or credit the excess over one-sixth of the estimateti payments to subsequent payments by Borrower, at the option of Borrower. If the total of the payments made by Borrower for item (a), (b), or (c) iti insufficient to pay the item when due, then Borro~ver shall pay to Lender an~ amount necessary to make up the deficiency un or before the date the item becomes due. As used in this Security Instrument, "Secretary" means the Secretary of Housing and Urban De~~elopment or his or her designee. htost Security Instruments insured by the Secretary are insured under programs which require advance payment of ~he 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 mongage insurance premium, then each monthly payment shal! also include either: (i) an installment of the annual mortgage insurance premium to be paid by Lender to the Secretary, or (ii) a monthly charge instead of a mortgage insurance premium if this Security lnstrument is held by the Secretary. Each monthly installment of the mortgage insurance premium shatl be in an amount sufficient to accumulate the full annual mortgage insurance premium with Lender one month prior to the date the full annual mertgage insurance premium is due to the Secretary, or if this Security Instrument is held by the Se~:retary, each monthly charge shall be in an amount equal to one-twelfth of one-half percent of the outstanding principal balancc due on the Note. If Barro~~er tetiders to Lender the full payment of all sums secured by tt~is Security Instrument, Borrower's account shall be credited ~~~ith 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 shatl promptly refund any excess funds to Borrower. Immediately prior to a foreclosure sale of the Property or its acquisition by Lender, Borrower's account shall be credited «~ith any balance remaining for all instaliments for items (a), (b), and (c). 3. Application of Pa~~ments. All payments under paragraphs 1 and 2 shall be applied by Lender as follows: . First, to the mortgage insurance premium to be paid by l.ender to the Secretary or to the monthly charge by the Secretary ~nstead of the monthly mortgage insurance premium, unless Borrower paid the entire mortgage insurance premium when this Security Instrument was signed; Second, to any taxes, special assessments, teasehold 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 Note; Fitth, to late charges due under the Note. 4. Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the Property, wheiher now in existence or subsequently erected, against any hazards, casualtie$, and contingencies, induding 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 subseqaently 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 toss payable clauses in favor of, and in a form acceptable to, Lender. j In the event of loss, Borrower shall give Lender immediate notice by mail. Lender may make proof of loss if not made promptly by Borrower. F.ach insurance company concerned is hereby authorized and directed to make payment for such loss ~ directty to Lender, instead of to Borrower and to Lender jointly. All or any part of the insurance proceeds may be applied ; by~ Lender, at its option, either (a) to the reduction 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 j 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 ro pay all outstanding indebtedness under the Note and this Security [nstrument 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 E :ndebtedness, all right, titte and interest of Borrower in and to insurance policies in force shall pass to the purct~.aser. i ~ ~ 5. Preservation and Maintenance of the Property, Leaseholds. Borrower shall 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 de~'ault. Lender may take reasonable action to protect F 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 Borroa•er acquires fee title to the Property, the leasehold and fee title shall 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, fines and impositions that are not included in Paragraph 2. Borrower shall pay these obligations on time directly to the entity which is owed the payment. If failure to pay would adversely affect Lender's interest in the Propeny, upon Lender's request Borrower sha11 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 other covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender's rights in the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do and pay whatever is necessary to protect the value of the Property and Lender's rights in the 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 additiona! debt of Borrower and be secured ~ by this Securiry Instrument. These amounts shall bear interest from the date of disbursement, at the Note rate, and at the S ~ option of Lender, shali be immediately due and payable. ~ ~ 7. Condemnation. The proceeds of any award or claim for damages, direct or consequential, in connection with any ~ Londemnation or other taking of any part of the Property, or for conveyance in place of condemnation, are hereby assigned F and shall be paid to Lender to the extent of the full amount of the indebtedness that remains unpaid under the Note and this ; ~ecurity ?nstrument. Lender shall apply such proceeds to thrreduction of the indebtedness under the Note and this Security lnstrument, first to any delinqu~nt amounts applied in the order provided in Paragraph 3, and then to prepayment of principal. PoRe 2 os4 BQOK ~ t~ PAGE~~7~ 6, ~S' ~ _ . _ . _ ' . .e '.~~,:,.F~ -.t,.~':-> ; . ~~.-a; ~y. ~ ~