Escrow Account

An escrow account (or impound account) is a designated holding account managed by the mortgage servicer to pay recurring property-related expenses. The servicer calculates estimated annual county property taxes and homeowners insurance premiums, divides the total by 12, and adds that amount to the borrower’s monthly mortgage bill. When property tax installments and insurance premiums come due, the servicer disburses the funds directly to county treasurers and insurance providers.