A new set of regulations has been implemented by the Financial Crimes Enforcement Network, or FinCEN, a U.S. bureau, regarding its Geographic Targeting Orders (GTOs). It mandates that title insurance providers disclose the true people who operate the shell corporations used in unfinanced residential real estate transactions. The renewed GTOs will be in place from October 16, 2023, through April 14, 2025, and will continue to assist FinCEN in tracing illicit funds and combatting financial crimes. This will give FinCEN much-needed updating of data that the agency is gathering as part of its ongoing regulatory efforts at targeting money laundering in real estate markets.
According to the release:
- FinCEN renewed GTOs covering key metropolitan areas in California, Florida, New York, and Texas, as well as Washington, D.C.
- To the great majority of covered areas, the purchase price threshold stays at $300,000, but an exception is made for Baltimore, where it is lowered to $50,000.
- It will specifically target shell companies in non-financed deals in real estate, which is targeted to crack down on illicit financial activity, making it possible to track suspect transactions and money laundering attempts in high-value markets.
Additionally, the agency also said: “FinCEN appreciates the continued assistance and cooperation of title insurance companies and the American Land Title Association in protecting real estate markets from abuse by illicit actors”
A new rule requiring professionals to record non-financed residential real estate transfers to trusts or legal organizations was implemented by FinCEN in August 2024. This nationwide rule will be applicable from December 1, 2025 onwards, to replace the existing Geographic Targeting Orders (GTOs).
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