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 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 itsits in the account. It allows the lender to take advantage of corporate tax deductions.

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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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 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 itsits in the account.
It allows the lender to take advantage of
corporate tax deductions.
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 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 itsits in the account. It allows the lender to take advantage of corporate tax deductions.
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