REPAIRS SET FORTH ON SCHEDULE III HERETO (SUCH REPAIRS
HEREINAFTER REFERRED TO AS "REQUIRED REPAIRS").
AMOUNTS SO DEPOSITED SHALL
HEREINAFTER BE REFERRED TO AS BORROWER'S "PROPERTY RESERVE FUNDS" AND THE
ACCOUNT IN WHICH SUCH AMOUNTS ARE HELD SHALL HEREINAFTER BE REFERRED TO AS
BORROWER'S "PROPERTY RESERVE ACCOUNT".
THE PROPERTY RESERVE FUNDS SHALL BE
DISBURSED IN ACCORDANCE WITH THE MECHANISMS FOR DISBURSEMENTS UNDER THE
REPLACEMENT RESERVE FUNDS.
SECTION 7.2
TAX AND INSURANCE ESCROW FUNDS. BORROWER SHALL PAY TO
LENDER ON EACH PAYMENT DATE (A) 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 FUNDS").
THE TAX AND INSURANCE ESCROW FUNDS AND THE MONTHLY DEBT SERVICE 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 FUNDS TO PAYMENTS OF
TAXES AND INSURANCE PREMIUMS REQUIRED TO BE MADE BY BORROWER PURSUANT TO THIS
AGREEMENT AND UNDER THE SECURITY INSTRUMENT.
IN MAKING ANY PAYMENT RELATING TO
THE TAX AND INSURANCE ESCROW FUNDS, 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 FUNDS 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 FUNDS.
ANY AMOUNT REMAINING IN THE TAX AND INSURANCE ESCROW FUNDS 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 FUNDS ARE 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