Escrow Negative Balance - How Can That Be?

[Eran Lifshitz]

I have an unclear issue and hope you can help me to clear it up.

I have saw few examples in tapes of assets which has negative escrow balance.

How can escrow balance be negative?

If the escrow has positive balance it pay the taxes and insurance, and if it has no balance it just don't pay, isn't it?

Does the negative balance indicate that there is a unpaid taxes debt to the county (meaning, if I see debt in the county account it should be referring to the same debt)?

[Dan Deppen]

The servicer may have advanced funds for taxes or insurance.