Real estate title companies, appraisers and escrow agents may be required to file suspicious activity reports and perform customer due diligence, a U.S. Treasury Department official said Monday. The Department's Financial Crime Enforcement Network (FinCEN) is considering anti-money laundering regulations for real estate settlement businesses as part of its larger oversight of residential mortgage lenders and originators (RMLOs), FinCEN director Jim Freis said in a speech to mortgage bankers at a conference in Phoenix. The agency is facing pressure to extend rules to escrow and settlement-related groups because there is a feeling that lax oversight in the mortgage sector contributed...
The real estate sector's vulnerabilities to money laundering and corruption extend beyond simple schemes to use illicit funds when purchasing property. In many cases, the third parties involved in such deals pose risks too.
The U.S. Justice Department's use of deferred prosecution agreements has been effective though often misunderstood, according to Jonathan E. Lopez, a former deputy chief of the department's Money Laundering and Bank Integrity Unit who oversaw investigations into HSBC and MoneyGram.
Plans by the Obama administration to pursue civil and criminal cases against institutions that illegally promoted mortgage-backed securities could also bring scrutiny to anti-money laundering compliance officers.