The funds from your escrow account are used to pay property taxes and homeowners insurance. The payment is called an escrow payment, and a mortgage servicing company withdraws the money from the payment you make monthly, places a portion into an escrow account, and subsequently distributes the funds to the city/state/county and homeowners insurance company when the bill is due.  This ensures you do not miss payments or become significantly delinquent on either of these bills while you have loan.