By Jim Buchta
Star Tribune (Minneapolis)
WWR Article Summary (tl;dr) Lynn Leegard is the founder of “TrustFunds” a company that enables homebuyers to submit their money electronically when buying a home instead of using a paper check.
After decades as a real estate attorney, Lynn Leegard is unsettled that homebuyers are still writing paper checks for their earnest money.
A couple of years ago, Leegard started researching how to launch a company that would enable homebuyers to submit their earnest money electronically, closing the last gap in what is otherwise a completely electronic process.
“The idea for TrustFunds really came from my passion of risk management for the industry,” she said of her new venture.
In a typical house purchase, the buyer writes a check and gives it to their agent, who takes the check to the listing agent.
The listing agent delivers that check to the trust account holder, who deposits the check and waits for the funds to clear the buyer’s bank.
It’s an inconvenience for those who have to deliver the check, but there’s also an element of risk for the professionals involved in the transaction, Leegard said. With the check changing hands multiple times, the buyers’ banking information is vulnerable and the people handling the check are responsible for its whereabouts.
And, at a time when many people do all their banking online, it’s a step in the homebuying process that seemed antiquated.
When Leegard’s daughter, for example, bought her first house, her agent asked her to write a check for the earnest money, but she couldn’t because she didn’t have a check book. Fortunately, her husband did, otherwise she would have had to get a cashier’s check, deliver it to her agent and document the withdrawal for her mortgage lender.
Online transactions carry their own risk, and Leegard lacked the expertise needed to tackle the technical issues including programming and e-commerce components of the process. So she teamed up with four partners with experience in electronic payment technology, including one who was able to do much of the coding.