Finance
What is the purpose of an escrow account held by a mortgage lender?
ATo hold the buyer's earnest money deposit until closing
BTo collect monthly payments for property taxes and insurance and pay them when due✓ Correct
CTo collect the broker's commission
DTo store the mortgage documents on behalf of the borrower
Explanation
A mortgage lender's escrow (impound) account collects a portion of the borrower's monthly payment to accumulate funds for paying property taxes and homeowner's insurance when they come due.
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