Common use of Payment Reserve Clause in Contracts

Payment Reserve. (a) Contemporaneously with the execution hereof, Mortgagor has established with Mortgagee a reserve in the amount of $18,579.51 (the "Payment Reserve"). Mortgagor understands and agrees that, notwithstanding the establishment of the Payment Reserve as herein required, all of the proceeds of the Note have been, and shall be considered, fully disbursed and shall bear interest and be payable on the terms provided therein. No interest on funds contained in the Payment Reserve shall be paid by Mortgagee to Mortgagor. (b) For so long as no default has occurred hereunder or under any of the other Loan Documents beyond any applicable grace or cure period, Mortgagee shall on each monthly payment due date under the Note to and including May 1, 2006, advance from the Payment Reserve to itself the amount of the monthly installment due and payable by Mortgagor under the Note on such monthly payment due date and shall also advance from the Payment Reserve into the Impound Account the amount of any deposit for taxes and insurance