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What is an escrow cushion and why does Saxon maintain one?

cushion escrow maintain Saxon
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What is an escrow cushion and why does Saxon maintain one?

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An escrow cushion is designed to cover potential increases in tax and insurance payments that may occur during the escrow year. Absent unusual increases, this cushion insures that sufficient funds are in your escrow account to pay such increased amounts. Federal law prohibits these cushions from exceeding 1/6 of your tax and insurance disbursements for the year. However, state law may require lesser amounts to be held.

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