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GLOSSARY
ERO
ERO, or electronic return originator, is an IRS-authorized entity that performs e-filing of federal tax returns. Most commonly, these are professional tax preparers.
Escheat
Escheat is the assumption of property ownership by the government, where the deceased left no will, and there are no known heirs.
Escrow
A legal arrangement whereby money, property, deed, title etc are delivered to a third party or escrow agent to be held in trust pending the fulfillment of a contractual agreement. Once the event occurs, this deposit is returned by the escrow agent to the proper recipient.
Escrow account
An account held by the lender in which the borrower puts in an amount over and above the required sum of the principal and the interest. The additional money put in is used by the lender to pay for items like property taxes and homeowner's insurance when due. See further Escrow
Escrow agent
A neutral third party who is the keeper of the documents and money in a real estate transaction. When all of the conditions are met, the escrow agent releases the documentation and monies. This can also be known as an Escrow Company.
Escrow analysis
The lender performs a periodic usually annual examination of all escrow accounts to ensure that amounts being collected will pay for the anticipated expenditures like taxes, insurance etc. See further Escrow
Escrow closing
The final transfer of the title to the buyer after all of the conditions and paperwork have been met and completed.
Escrow company
An escrow company is a neutral intermediary in a property transaction that holds funds and documents. Once the conditions of the sale are fulfilled, the escrow company transfers the withheld items to the appropriate parties to complete the transaction.
Escrow disbursements
When funds put in the escrow accounts are used to pay extra expenses like mortgage insurance, hazard insurance and property taxes as and when they become due.\n\nSee further Escrow
Escrow payment
Escrow payment is the money withheld from a mortgage payment (by the loan servicer) to cover property taxes, insurance, and related fees as they become due.
Estate
Property owned by an individual. All real and personal property owned by an individual at the time of death.
Estate freeze
An estate freeze is a means of fixing the value of assets for tax purposes, so that future appreciation of the assets will not incur estate taxes when they're transferred to beneficiaries. There are various techniques used to accomplish this goal, and all of them are relatively sophisticated. Estate freeze strategies are implemented by individuals who have sizeable estates.
Estate planning
Estate planning describes the cumulative actions taken to manage the transfer of property to heirs upon one's death. An attorney often advises and implements estate planning actions, which can include: writing a will, taking proactive action to reduce estate tax liability, naming an executor of the estate, designating life insurance beneficiaries, etc.
Estate tax
A tax based on the market value of property, less any liabilities, at the time of the owner's death.
Estimated Closing Fees
An estimate of the fees that must be paid on or before the closing date by the buyer and/or seller for services. Typically, the average payment is between 2 % and 5% of the loan amount. This will vary by lender, property location, and type of mortgage.