There are big advantages to escrow accounts for both lenders and borrowers. For the lender, having an escrow account assures that the house is insured and that taxes are being paid so no liens are filed on the house. For the borrower, it offers the convenience of one monthly payment and not having to budget for big once- or twice-a-year tax payments.
There really is no disadvantage to the lender of having an escrow account, other than the time and expense needed to administer it. For borrowers, the one big drawback is the potential lost earnings on the money put into escrow. The federal government does not require lenders to pay interest on money put into escrow and only a handful of states do. That means you are missing out on some potential interest and investment returns on the money you put into escrow. However, many people are willing to give that up in exchange for the convenience.