Foreclosures
WHAT IS AN ESCROW ACCOUNT?
An “escrow account”, oddly, has nothing to do with the escrow process itself. It is the common term for funds that are collected from you monthly by the bank in addition to your principal and interest (usually called your “mortgage payment”) and that are held for you “in escrow”, that is, in a trust account, and used by the bank for paying your property taxes and homeowner’s insurance.
An “escrow”, on the other hand, is a separate function from the actual home purchase and from the lending process. There are a large number of real estate escrow companies, some affiliated with title companies, some with real estate brokerages An “escrow holder” is an entity that serves both parties in a transaction as a neutral party, being certain that contract terms are carried out before title and purchase money change hands.
Escrow terminology, how to open an escrow and a number of escrow tips are shown on the page Life of an Escrow that you may view by clicking here.
