impound

verb im·pound \ im-ˈpau̇nd \
Updated on: 13 Oct 2017

Definition of impound

transitive verb
1 a :to shut up in or as if in a pound :confine
b :to seize and hold in the custody of the law
c :to take possession of
  • she was dismissed and her manuscript impounded
  • —Jonathan Weiner
2 :to collect and confine (water) in or as if in a reservoir

Examples of impound in a Sentence

  1. The police impounded her car because it was illegally parked.

  2. impound evidence for a trial

Recent Examples of impound from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'impound.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of impound

15th century


Financial Definition of IMPOUND

impound

What It Is

In the real estate world, an impound is an account that mortgage companies use to collect property taxes, homeowners insurance, private mortgage insurance and other payments that are required by the homeowner but are not part of principal and interest. Impound accounts are also called escrow accounts.

How It Works

Let's say John Doe buys a house and borrows $100,000. The interest rate is 4%, and the loan is a 30-year mortgage. His monthly payment is $477.42, which includes interest and principal.

John Doe didn't put down 20%, so the lender requires an impound account. Every month, another $250 is deducted automatically from John's checking account and put in the impound account. This ensures that the money is there to pay the insurance and property tax bills when they arrive every six months.

Why It Matters

Impound accounts mitigate a lender's risk because they ensure that the homeowner won't lose the house (which is the bank's collateral for the mortgage) due to tax liens or unpaid insurance bills. Usually, the mortgage lender is responsible for paying the tax and insurance bills out of the impound account on time; however, if the mortgage lender fails to do so, the homeowner is still on the hook.

Usually, lenders require impound accounts when the borrower puts down less than 20% on a house. If the borrower puts down more than 20%, impound accounts aren't always required, though they are often convenient for ensuring that the bills are paid.


IMPOUND Defined for English Language Learners

impound

verb

Definition of impound for English Language Learners

  • : to use legal powers to get and hold (something)


IMPOUND Defined for Kids

impound

verb im·pound \ im-ˈpau̇nd \

Definition of impound for Students

impounded; impounding
:to shut up in or as if in an enclosed place
  • impound cattle

Law Dictionary

impound

transitive verb im·pound \ im-ˈpau̇nd \

legal Definition of impound

:to take control of in the custody of the law or by legal authority
  • impound a vehicle
  • the police impounded the dwelling until the search warrant was obtained

impoundment

noun


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