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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, 11 months ago.

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  • #788
    Avatar of blackpuma

    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.

    Avatar of Administrator

    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..

    Avatar of anonymous

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

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