What is the main reason lenders pay borrowers' property taxes through a pre-paid escrow account? It prevents a tax lien from being applied to the home. The tax lien would be senior to the mortgage lien. It allows the lender to take advantage of corporate tax deductions. It prevents the borrower from refinancing with another lender because they would lose all of their escrow funds. It allows the lender to earn interest on the pre- paid tax money as it sits in the account. Submit
What is the main reason lenders pay borrowers' property taxes through a pre-paid escrow account? It prevents a tax lien from being applied to the home. The tax lien would be senior to the mortgage lien. It allows the lender to take advantage of corporate tax deductions. It prevents the borrower from refinancing with another lender because they would lose all of their escrow funds. It allows the lender to earn interest on the pre- paid tax money as it sits in the account. Submit
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:What is the main reason lenders pay borrowers'
property taxes through a pre-paid escrow
account?
It prevents a tax lien from being applied to the
home. The tax lien would be senior to the
mortgage lien.
It allows the lender to take advantage of
corporate tax deductions.
It prevents the borrower from refinancing with
another lender because they would lose all of
their escrow funds.
It allows the lender to earn interest on the pre-
paid tax money as it sits in the account.
Submit
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