What term refers to a portion of monthly payments held by the lender to cover expenses like taxes and insurance?

The term that refers to a portion of monthly payments held by the lender to cover expenses such as taxes and insurance is commonly known as "Impounds" or "Escrows." This process allows the lender to collect funds along with the borrower's mortgage payment, which are then allocated for property-related expenses, ensuring that these costs are paid on time. By managing these funds, lenders can help borrowers avoid potential issues such as tax liens or insurance lapses, ultimately safeguarding the lender's investment.

While "Reserve Accounts" and "Escrow Account" are closely related concepts, they often refer to specific types of accounts with slightly different uses. "Tax Liens," on the other hand, pertain to a legal claim against a property due to unpaid taxes and are unrelated to the holding of funds for future payments. Thus, recognizing the primary function of impounds or escrows in the context of managing monthly payments is crucial for understanding how lenders protect their interests and manage property-related expenses.