Finance
What is the purpose of an escrow impound account (reserve account)?
ATo hold the earnest money deposit
BTo collect and disburse property taxes and insurance premiums on behalf of the borrower✓ Correct
CTo fund property improvements required by the lender
DTo secure the down payment until closing
Explanation
An impound (escrow reserve) account is maintained by the lender to collect monthly installments from the borrower for property taxes and homeowner's insurance, ensuring these obligations are paid on time.
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