AND SUCH DISBURSEMENT SHALL BE MADE ONLY UPON SATISFACTION OF EACH CONDITION
CONTAINED IN THIS SECTION 7.1.2.
SECTION 7.2.
TAX AND INSURANCE ESCROW FUND.
BORROWER SHALL PAY TO
LENDER ON EACH PAYMENT DATE (A) ONE-TWELFTH 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 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 PAYMENTS OF INTEREST OR PRINCIPAL OR
BOTH, PAYABLE PURSUANT TO THE NOTE, 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
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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.
THE TAX AND INSURANCE ESCROW FUND SHALL BE HELD BY LENDER IN AN
INTEREST-BEARING ACCOUNT AND SHALL AT LENDER'S OPTION BE HELD IN ELIGIBLE
ACCOUNT AT AN ELIGIBLE INSTITUTION. ANY INTEREST EARNED ON SAID ACCOUNT SHALL
ACCRUE IN SAID ACCOUNT FOR THE BENEFIT OF BORROWER, BUT SHALL REMAIN IN AND
CONSTITUTE PART OF THE TAX AND INSURANCE ESCROW FUND, AND SHALL BE DISBURSED IN
ACCORDANCE WITH THE TERMS HEREOF.
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