Definitions for "Escrow Accounts"
Keywords:  abeyance, monthly, taxes, bought, trust
When homes are bought with 80% or more financing from a single lender, the lender generally requires the borrower to make monthly payments to a lender escrow (trust) account. The purpose of the lender escrow account is to accumulate money to assure that the borrower's property taxes and property insurance are paid (and thus reduce the lender's risk).
Cash held in abeyance until an event occurs or does not occur. For example, funds paid monthly by a mortgagor to the mortgagee are held in escrow until they are due to the taxing authority.
under state law, mortgage borrowers can choose between paying their real estate taxes themselves or making monthly payments into an escrow account with their lender. All FHA and VA loans require escrow accounts.