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Contingency fund=escrow ?

This topic contains 1 reply, has 0 voices, and was last updated by Avatar of blackpuma blackpuma 14 years, 4 months ago.

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  • #788
    Avatar of blackpuma
    blackpuma
    Member

    In many settings we speak of the contingency fund as escrow, or escrow-like. I’m just curious as to whether it actually is “escrow” or not. I’m assuming that it is because Black’s second sense is:

    An account held in trust or as security . — Also termed escrow account; impound account; reserve account.

    This seems to describe the contingency fund, but there are always nuances that I’m not aware of.

    #11195
    Avatar of Administrator
    Administrator
    Keymaster

    Soft&fuzzy,
    I’d say the trust term is like having an open escrow and the contingency fund is like a reserve account but the 3 rd party entity being the trustee is similar from my take as a escrow officer in that both are impartial, unbiased in the handing your transaction.
    So I would think your assertion is correct.

    I like the idea of a contingency fund since it shows the seller we are securing and protecting him/her in the transaction. If I was told of this feature and verfied that with the trustee I would most likely feel comfortable that my mortgage will be paid every month on time..
    Colin

    #11196
    Avatar of anonymous
    anonymous
    Member

    The contingency fund is used by the Trustee as directed by the beneficiaries of the trust.

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