October Research, LLC will host a webinar Feb. 5 at 2 p.m. (ET) titled “Countdown to Compliance: A Demo on FinCEN’s Real Estate Report” featuring Florida Agency Network President Amy Gregory and FincenRealEstateReport.com CEO Charles Wismer.
After our initial webinar on this topic, audience members asked for a live demonstration of the Financial Crimes Enforcement Network’s real estate report, which will be required on certain closings beginning March 1. Gregory and Wismer answered a few questions about some topics that will be addressed on the webinar.
Q What are some of the key points to remember for those filling out the reports as it pertains to the FinCEN rule?
Amy Gregory: Determining if you will have a trained person handle this process to make sure all key points are handled or if a great vendor is a better option.
Charles Wismer: It’s essential to be familiar with all reporting requirements or have a system that can do it for you. Situations like entities with foreign addresses or trusts with entities involved can get complicated very quickly. We’ve seen error/incompletion rates averaging 50 percent on first buyer and seller submission from regular PDF or web form processes. Having logic flows or experts to make sure everything is filled out properly ahead of closing is critical.
Q What might individuals not understand as to the required information in order to stay compliant?
Gregory: Although this is new, this is mandatory to report on applicable closings, even if it is for your best client.
Wismer: All information must be collected ahead of closing for compliance and manual processes. Information may not be correct unless checked properly after submission. Closing with this information not properly collected creates enormous liability that may go unrealized.
Q What information do title agents need to collect to include on these forms?
Gregory: There is a lot of information that will be required to collect from buyers and sellers and this is different and much more complex than the geographic targeting orders.
Wismer: There are 111 fields including property transaction information, buyer information, seller information, owner information for involved entities and trusts, and payment source information.
Q In your opinion, what errors might be evident as to what gets omitted from the reports?
Gregory: The title agent may not complete all of the information needed and also may miss the required timeframe to report.
Wismer: Additional owners, those with substantial control, and payment information for third-party payments are areas where omissions can frequently occur.
Q How will this particular change in reporting affect how transactions may be reviewed in the future?
Gregory: This reporting adds another layer, and diligence is needed especially when a file changes midstream from an institutional lender to cash or private money or the buyer changes from an individual.
Wismer: Approximately 10 percent-to-20 percent of files will require FinCEN reports. Automations in the TPS or free processes to review files become critical for making sure files do not need reports.
Click here to register for this webinar.