escrow account is established at the time you close your mortgage loan. This account is held by the lender for future payments as they become due of recurring items relating to the mortgaged property such as real estate taxes and insurance premiums.

impound or escrow account allows you to include, with your monthly principal and interest payment, a small portion of the cost toward your Real Estate Taxes and Hazard Insurance. The lender sets these additional funds aside until the Tax or Insurance bills come due, then pays the amount due from the account. Under some programs, an impound/escrow account may be mandatory; under others, it may be optional-although you may have to pay a fee to exercise that option. Back to List

It's not a law- just different investor "rules." Have you ever heard the phrase "He who has the gold makes the rules?" FHA and VA require escrow accounts for all loans they insure and guarantee. There are so many different conventional investors and they vary as to their individual wants and needs.