In one sentence
A lender-held account, also called an escrow account, that collects and pays a property's taxes and insurance.
The longer version
An impound or escrow account collects monthly amounts from the borrower to pay property taxes and insurance premiums when due, ensuring these obligations that protect the collateral are met. It is standard on many commercial loans.
Impound accounts are set up at closing and managed through servicing, with annual analyses to adjust the monthly amount, part of the ongoing administration a servicer runs.
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