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Title Industry tasked with identifying money launderers
by CHARLENE PERRY | 2016/01/14 |

It was with interest that I read this report today that adds just one more thing to the list of things we title agents are/may be tasked with having to do for the Government.


From The Blotter, Wednesday, January 13, 2016 we learn that the Financial Crimes Enforcement Network (FinCEN) has issued Geographic Tracking Orders (GTO's) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay "all cash" for high-end residential real estate in the Borough of Manhattan in New York City, N.Y. and Miami-Dade County in FL.


Luckily I am in Maryland and so far am not tasked with identifying or reporting who the true "beneficial owner" is behind a legal entity involved in "all cash" transactions, but my fear is that this is probably just a test in these states and this will become a nationwide requirement. 

While we understand the importance of combating money laundering in the real estate sector, it's just one more thing that we as title agents are being asked to do, adding more time and costing more money for each transaction.   As it is we are made to report to our State government the sale of the real estate, the Federal government for the sale of the real estate as well as collecting, in some instances, withholding taxes for our State on the sale of the real estate. 

According to the article, "FinCEN is covering certain title insurance companies because title insurance is a common feature in the vast majority of real estate transactions". 

It will be interesting to see how this plays out in the coming months.  For now, this is a "temporary order" becoming effective as of March 1 and running 180 days; expiring on August 27. 


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