Finance
What is the primary purpose of an escrow account held by a mortgage lender?
ATo hold earnest money during the transaction
BTo collect and pay property taxes and homeowner's insurance on behalf of the borrower✓ Correct
CTo hold the seller's proceeds until title is clear
DTo accumulate funds for future home improvements
Explanation
Lenders require escrow accounts (impound accounts) to collect monthly installments toward property taxes and homeowner's insurance, ensuring these obligations are paid on time.
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