The Power Of Escrow

Escrow is a legal arrangement whereby a thing (often money, but sometimes other property such as art, a deed of title, or software source code) is delivered to a third party (called an escrow agent) to be held in trust pending a contingency or the fulfillment of a condition or conditions in a contract. Upon that event occurring, the escrow agent will deliver the thing to the proper recipient, otherwise the escrow agent is bound by her or his fiduciary duty to maintain the escrow account.

— From Wikipedia, the free encyclopedia.

Banks are comfortable loaning against marginable public securities as collateral. The problem for the banking customer, is that once pledged as collateral, securities cannot be traded without first retiring the loan and releasing the lien over the securities.

The LeapTrust Brokerage Escrow delivers the best of both worlds - the customer can continue to trade the securities in a brokerage account, while releasing the equity value of the account pledged as collateral for bank lending. Under the LeapTrust Brokerage Escrow, the brokerage account is opened by a bank and trust as trustee for the customer, while LeapTrust retains all trading privileges on the brokerage account under instruction of the customer, but cannot withdraw funds.

Once the marketable securities are held and traded in escrow, the Consent Agreement of the LeapTrust Brokerage Escrow is executed to place the brokerage account equity as collateral for a bank loan.

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