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Escrow protects both lenders and borrowers against lapsed insurance or delinquent taxes, by setting aside money each month to pay bills like:
- Real estate taxes
- Homeowners (fire) insurance
- Flood insurance
- Catastrophe (wind, earthquake, sinkhole) insurance
- Homeowner/condo association fees
Escrow accounts may be required, depending on your Home Loan terms. If your Home Loan has an Escrow account, each year you’ll receive an Escrow Account Disclosure Statement reviewing deposits to and payments from your Escrow account.