The primary function of escrow administration in loan servicing is to?

The primary function of escrow administration in loan servicing involves managing and disbursing funds for property taxes and insurance. In a typical mortgage arrangement, borrowers are often required to pay a portion of their property taxes and homeowners insurance premiums as part of their monthly mortgage payments. These funds are placed into an escrow account, which is a secure account held by the lender or servicer.

When the property taxes and insurance premiums are due, the escrow administrator is responsible for ensuring that these payments are made on behalf of the borrower. This ensures that the property remains protected from tax liens and that necessary insurance coverage is maintained, reducing the risk for both the borrower and the lender. By handling these payments, the escrow administration provides a crucial service that helps borrowers avoid lapses in coverage or penalties associated with late property tax payments.

The other choices reflect functions that are outside the scope of escrow administration. Facilitating the transfer of mortgage documents involves the legal and logistical aspects of transferring ownership or obligations, while underwriting loan applications and evaluating borrower creditworthiness are roles typically associated with the initial loan approval process rather than ongoing loan servicing.