Escrow waiver
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Definition
An escrow waiver means the borrower pays property taxes and insurance directly instead of through a mortgage escrow account. It is not an escrow shortage, not an escrow surplus, and not the escrow account itself.
In plain English
Many mortgages collect taxes and insurance in monthly escrow. An escrow waiver turns that collection off so the borrower pays those bills on their own. The escrow account is the account. A shortage or surplus is a later balance event inside that account.
Technical definition
Fannie Mae Selling Guide B2-1.5-04 is PRIMARY for the escrow-waiver heading. Regulation X escrow-account rules are supporting context, not a waiver schedule.
Why it matters
Borrowers hear they can drop escrow and think the account rules disappear. Waiver eligibility and fees are not universal.
Related terms
Sources reviewed
12 CFR 1024.17
Source reviewedSeptember 6, 2026
Escrow Accounts
Source reviewedSeptember 7, 2026
Important note
An escrow waiver means the borrower pays taxes and insurance directly instead of through an escrow account. Eligibility, fees, and legal limits are not universal and are not listed here.
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