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Authorization by the lender for the borrower to pay taxes and insurance
directly. This is in contrast to the standard procedure, where the lender adds a charge to the
monthly mortgage payment that is deposited in an escrow account, from which the lender pays the
borrower's taxes and insurance when they come due. On some loans lenders will not waive escrows, and
on loans where the waiver is permitted lenders are likely either to charge for it in the form of a
small increase in points or to restrict it to borrowers making a large down payment.