Escrowing and Default on Loan

Posted By: cbinder63

Escrowing and Default on Loan - 02/07/13 11:30 PM

If we are escrowing on a loan, and the loan is in default, can the escrowed funds be used to reduce the secured debt?
If so, would this language be included in the loan note?
Or, are we not able to do this, as the purpose of the escrow is for taxes and insurance. Thanks in advance.