Notary signing agents learn the difference between escrow and impound accounts, what PITI means, and why these concepts matter when helping borrowers understand their loan documents.
Chapters
One of the biggest questions a borrower has for a notary public loan signing agent what in the world is an escrow account or an impound account? And what does P I T I stand for? How do lenders calculate what to collect monthly for these escrow or impound accounts? So why is this important for you to know as a notary loan signing agent? And it is because when you're doing a loan signing, the borrower may ask you a question around their impound account escrow account, and being able to point out the correct answer without needing to get the loan officer on the phone can save you a lot of time at a signing appointment. So first things first. A homeowner owes the county the property is located in, property taxes twice a year and their homeowner's insurance bill once a year. So logically, the homeowner would set aside money in their own checking account for those bills every month and pay the bills when they come due. However, there are some homeowners who do not properly save for those bills and then pay them late or don't pay them at all. And that is a problem. To solve that problem, banks either require or give the homeowner an option of giving the bank money each month for those bills to ensure they're always paid out on time by the bank. And that is what an escrow account or impound account is a savings account for a homeowner's property taxes and homeowners insurance.
