ONE-TWELFTH (1/12) OF THE
TAXES THAT LENDER ESTIMATES WILL BE PAYABLE DURING THE NEXT ENSUING TWELVE (12)
MONTHS IN ORDER TO ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY ALL SUCH TAXES
AT LEAST THIRTY (30) DAYS PRIOR TO THEIR RESPECTIVE DUE DATES, AND (B)
ONE-TWELFTH (1/12) OF THE INSURANCE PREMIUMS THAT LENDER ESTIMATES WILL BE
PAYABLE FOR THE RENEWAL OF THE COVERAGE AFFORDED BY THE POLICIES UPON THE
EXPIRATION THEREOF IN ORDER TO ACCUMULATE WITH LENDER SUFFICIENT FUNDS TO PAY
ALL SUCH INSURANCE PREMIUMS AT LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION OF
THE POLICIES (SAID AMOUNTS IN (A) AND (B) ABOVE ARE HEREINAFTER CALLED THE "TAX
AND INSURANCE ESCROW FUND").
THE TAX AND INSURANCE ESCROW FUND AND THE MONTHLY
DEBT SERVICE
67
PAYMENT AMOUNT, SHALL BE ADDED TOGETHER AND SHALL BE PAID AS AN AGGREGATE SUM BY
BORROWER TO LENDER.
LENDER WILL APPLY THE TAX AND INSURANCE ESCROW FUND TO
PAYMENTS OF TAXES AND INSURANCE PREMIUMS REQUIRED TO BE MADE BY BORROWER
PURSUANT TO THIS AGREEMENT AND UNDER THE MORTGAGE.
IN MAKING ANY PAYMENT
RELATING TO THE TAX AND INSURANCE ESCROW FUND, LENDER MAY DO SO ACCORDING TO ANY
BILL, STATEMENT OR ESTIMATE PROCURED FROM THE APPROPRIATE PUBLIC OFFICE (WITH
RESPECT TO TAXES) OR INSURER OR AGENT (WITH RESPECT TO INSURANCE PREMIUMS) OR
FROM BORROWER WITHOUT INQUIRY INTO THE ACCURACY OF SUCH BILL, STATEMENT OR
ESTIMATE OR INTO THE VALIDITY OF ANY TAX, ASSESSMENT, SALE, FORFEITURE, TAX LIEN
OR TITLE OR CLAIM THEREOF, PROVIDED, HOWEVER, LENDER SHALL USE REASONABLE
EFFORTS TO PAY SUCH REAL PROPERTY TAXES SUFFICIENTLY EARLY TO OBTAIN THE BENEFIT
OF ANY AVAILABLE DISCOUNTS OF WHICH IT HAS KNOWLEDGE.
IF THE AMOUNT OF THE TAX
AND INSURANCE ESCROW FUND SHALL EXCEED THE AMOUNTS DUE FOR TAXES AND INSURANCE
PREMIUMS, LENDER SHALL, IN ITS SOLE DISCRETION, RETURN ANY EXCESS TO BORROWER OR
CREDIT SUCH EXCESS AGAINST FUTURE PAYMENTS TO BE MADE TO THE TAX AND INSURANCE
ESCROW FUND.
ANY AMOUNT REMAINING IN THE TAX AND INSURANCE ESCROW FUND AFTER
THE DEBT HAS BEEN PAID IN FULL SHALL BE RETURNED TO BORROWER.
IN ALLOCATING
SUCH EXCESS, LENDER MAY DEAL WITH THE PERSON SHOWN ON THE RECORDS OF LENDER TO
BE THE OWNER OF THE PROPERTY.
IF AT ANY TIME LENDER REASONABLY DETERMINES THAT
THE TAX AND INSURANCE ESCROW FUND IS NOT OR WILL NOT BE SUFFICIENT TO PAY TAXES
AND INSURANCE PREMIUMS BY THE DATES SET FORTH ABOVE, LENDER SHALL NOTIFY
BORROWER OF SUCH DETERMINATION AND BORROWER SHALL INCREASE ITS MONTHLY PAYMENTS
TO LENDER BY THE AMOUNT THAT LENDER ESTIMATES IS SUFFICIENT TO MAKE UP THE
DEFICIENCY AT LEAST THIRTY (30) DAYS PRIOR TO DELINQUENCY OF THE TAXES OR
INSURANCE PREMIUMS.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
BORROWER SHALL NOT BE REQUIRED TO MAKE MONTHLY DEPOSITS WITH RESPECT TO THE TAX
AND INSURANCE ESCROW FUND PROVIDED THAT: (I) NO EVENT OF DEFAULT HAS OCCURRED,
(II) BORROWER PAYS ALL TAXES PRIOR TO DELINQUENCY AND INSURANCE PREMIUMS AS THE
SAME BECOME DUE AND PAYABLE AND DELIVERS TO LENDER