Operations
I n August 2024, the federal government’s Financial Crimes Enforcement Network (FinCEN) announced a new rule that affects residential real estate that is transferred to a legal entity or trust but is not financed. Once in effect, this will constitute a significant change to the way real estate closings will be held and reported in the future.
THE BIG QUESTION: “WHY?”
The bottom line is that bad actors invest in residential real estate to launder funds and hide their identities, which can lead to distorted housing prices
as well as threats to the country’s economy and national security.
According to its website, the mission of FinCen, a bureau of the U.S. Department of Treasury, is “to safeguard the financial system from illicit activity, counter money laundering and the financing of terrorism, and promote national security through strategic use of financial authorities and the collection, analysis, and dissemination of financial intelligence.”
Federal Rule Reshapes Real Estate Closings FINANCING METHODS AND OWNERSHIP STRUCTURES ARE UNDER THE MICROSCOPE IN A SWEEPING FEDERAL UPDATE.
WHAT THE RULE REQUIRES
Named the Residential Real Estate Rule, this new rule requires a “Real Estate Report” to be filed with FinCEN and records to be kept regarding “certain high-risk, non-financed transfers of residential real estate property to specified legal entities and trusts.”
GAYLENE ROGERS LONERGAN
18 | think realty magazine :: may - june 2025
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