ABC Lending requires mortgage borrowers to prepay 12 months of property taxes and insurance at closing. In Escrow account must these funds be held.
When two parties to a financial transaction agree to hold valuables like money, property deeds, and personal financial papers in an escrow account until certain requirements are met, the account is maintained by an outside entity.
Escrow is a legal arrangement in which a third party accepts and disburses funds or property on behalf of the principal parties to a transaction, with the disbursement subject to terms established by those parties.
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