Fed Takes Aim at Real Estate Secrecy And Wants To Know Who is Completing Real Estate Deals with Cash In Miami And Other Cities.
Real Estate Deals For Cash. Could trouble be brewing.
The U.S. Department of the Treasury announced Wednesday that title companies handling cash real estate deals in Miami and Manhattan will have to reveal the buyers’ identity if they are spending more than $3 million. Miami is on the top of the list because 8 out of 10 top 10 cash markets are in Florida and Miami is number one.
This new GTO ( geographic targeting orders) regulation 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, New York, and Miami – Dade County, Florida.
With these GTOs, FinCEN is proceeding with its risk – based approach to combating money laundering in the real estate deal sector. Having prioritized anti-money laundering protections on transactions involving lending, FinCEN’s remaining concern is with the money laundering vulnerabilities associated with all-cash transactions. This includes transactions in which individuals use shell companies to purchase high – value residential real estate, primarily in certain large U.S. cities.
The new rules will lift the veil of secrecy that covers many cash transactions, which are often made by shell corporations without revealing the buyers’ names. The regulation will also shed light on how many cash transactions are made by foreign investors. This new rule applies to all real estate deals over $3 million dollars.
The information gathered from the GTOs will advance law enforcement’s ability to identify the natural persons involved in transactions vulnerable to abuse for money laundering. This would mitigate the key vulnerability associated with these transactions –the ability for individuals to disguise their involvement in the purchase.
The other strong cash markets in Florida are Sarasota, Ft Myers, Daytona Beach, Tampa, Lakeland, Melbourne and Orlando.
The Treasury Department is looking for illegal cash from the usual nefarious suspects around the world. But could the treasury department stop or slow down legal money that is being spent one properties here in the US. Nobody wants to be investigated by the U.S. Government.