Sample Mortgage Form
UNIFORM COVE NANTS. Borrower and Lender covenant and agree as follows:
1. Payment of Principals and Interest. Borrower shall promptly pay when due the
prin cipa l of and interest on the indebtedness evidenced by the Note, prepayment and late
charges as pro vi de d i n the N ote, a nd the p rincipal of a nd interest on any Fu tu re Advances
secure d by this Mortgage.
2. Funds for Taxes and Insurance. Subject to applicable law or to a written waiver by
Lender, Borrower shal l pay to Lend e r o n the da y m o nt hly instal lments of princ i pa l an d
interest are payable under the Note, until the Note is paid in full, a sum (herein "Funds")
equal to one-twelf t h of the yearly taxes a nd asse ssments whi ch m a y attain priority over
this Mo rt gage, and ground rents on the Prop erty, if any, pl us one-twe lft h of yearly
premium installments for hazard insurance, plus one-twe lf th of yearly prem ium
installments for mortgage insurance, if any, all as reasonably estimated initially and from
time to time by Lender on the basis of assessments and bills and reasonable estimates
thereof.
The Fu nds shal l be held in an insti t u tion the dep os its o r accou nt s of which are ins ure d or
guarant eed by a Federa l or sta te agenc y (including Lender if Len der is such an
institution). Lender shall apply the Funds to pay said taxes, assessments, insurance
premi ums and gro und rents . Le nder may not charge for so holdi ng a n d applying th e
Funds, analyzing said account, or verifying and comp il i n g sai d asses sments and bills,
unless Lender pays Borrower interest on the Fu n ds and applicab le law permits Lender to
make such a charge. Borrower and Lender may agree in writing at the time of execution
of this Mortgage that interest on the Funds shall be paid to Borrower, and unless such
agreement is made or applicable law requires such interest to be paid, Lender shall not be
required to pay Borrower any interest or earnings on the Funds. Lender shall give to
Borrower, wit h o ut charge, an annual accounti n g of t he F unds show ing credi ts an d debits
to the F un ds and t he purp ose for which ea ch debit to t he Fun ds was made. The Fu nds a re
pledged as additional sec urity for the sums secured by this Mortgage.
If the amount of the Funds held by Lender, together with the future monthly
installments of Funds p a yabl e prior to the due dates of taxes, assessm e nts, ins ura nce
premiums and ground rents, shall exceed the amount required to pay said taxes,
assessments, insurance premiums and ground rents as they fall due, such excess shall be,
at Borrower's option, either promptly repaid to Borrower or credited to Borrower on
monthl y instal lments of Funds . If the amount of the Funds hel d by Lender shall no t be
sufficie n t to pay taxes, ass essments, ins urance prem iums and ground re nts as they fall
due, Borr ow er s hal l pay to Lender any amount necess ary to make up t he d eficienc y
within 30 day s from the date notice is mailed by Lender to Borrower requesting payment
thereof.
Upon payment in full of all sums secured by this Mortgage, Lender shall promptly
refund to Borrower any Funds held by Lender. If under paragraph 18 hereof the Property
is sold or the Property is otherwise acquired by Lender, Lender shall apply, no later than
immediately prior to the sale of the Property or its acquisition by Lender, any Funds held
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