An escrow account is an account in which a borrower’s property taxes and/or insurance are held in trust. Because Lenders require that the properties they lend to purchase are insured and taxes are paid they often require the escrow account. As such,the prior year’s annual property tax and insurance are divided evenly amongst the monthly mortgage payments. When taxes are due (usually in the Fall) and insurance (annually renewing on the date of purchase of the property) the Lender remits the payments with the funds it has “escrowed” from the borrower. If the property is sold, any funds in escrow in excess of what is owed as of that date of sale will be returned to the borrower.