Final answer:
A lender's escrow account holds funds for property taxes, homeowners insurance, and PMI, but not for the borrower's monthly utility bills.
Step-by-step explanation:
The lenders escrow account is used to collect and hold funds for specific purposes related to a mortgage. These purposes generally include payment of property taxes, homeowners insurance premiums, and private mortgage insurance (PMI), if necessary. However, a lender's escrow account does not handle the borrower's monthly utility bills. While the escrow account simplifies the homeowners' financial obligations by incorporating property-related costs into the monthly mortgage payment, it is not used to manage day-to-day living expenses like utility bills.