An escrow account is a savings account established to hold money collected to pay your hazard insurance and property taxes when they become due. This is also referred to as an "impound account." 

Lenders usually require escrow payments every month to ensure that they have enough to pay the insurance and taxes for you. This is a way for lenders to secure their collateral.

For instance, Sally has her home loan through TTCU. If Sally’s home tragically burned down in a fire and she had not paid her hazard insurance premium – the lender (TTCU) would not be able to recoup the cost.
In addition, if Sally failed to pay her property taxes, the government could foreclose on her property.