Question

When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, a "Budget Mortgage or Deed of Trust" occurs. These escrow accounts may also be referred to as

a) impound or Reserve Accounts.
b) compound or Reserve Accounts.
c) insured or Restricted Accounts.
d) interlocked and Restricted Accounts.

Answer 1

When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, it is called a Budget Mortgage or Deed of Trust. These escrow accounts may also be referred to as impound or Reserve Accounts.

Step-by-step explanation:

When a lender requires tax and/or insurance amounts to be deposited with the lender by placing the monies in an escrow account, it is called a "Budget Mortgage or Deed of Trust." These escrow accounts may also be referred to as impound or Reserve Accounts. In this arrangement, the lender collects a portion of the tax and insurance payments from the borrower each month and holds it in the escrow account. Then, when the taxes and insurance premiums are due, the lender pays them on behalf of the borrower.