Finance
The primary purpose of an escrow account (impound account) held by a lender is to:
AHold the buyer's earnest money until closing
BCollect and pay the borrower's property taxes and insurance premiums✓ Correct
CHold the seller's proceeds pending final title clearance
DAccumulate the borrower's down payment over time
Explanation
A lender's escrow (impound) account collects pro-rated portions of property taxes and hazard insurance premiums with each monthly mortgage payment. The lender then pays these obligations on behalf of the borrower when due. This protects the lender's collateral by ensuring taxes and insurance are maintained.
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