Although some lenders may credit the escrow balance against the payoff, it is not very commonly done.  In most instances, lenders [or servicers in many cases] will want to be sure of two things:

1. The amount received is sufficient to pay off the amount owed and
2. The funds sent are cleared through the banking system and the lender can authorize the discharge of the debt and the paperwork to be recorded that evidences the satisfaction of mortgage.

Once those two things have occurred, the lender will usually forward the remainder to the borrower in the form of a check.  In any event, the proceeds from an escrow on a paid off loan are to be forwarded within 30 days of receipt of the payoff funds.