Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Back to the Future of Mortgage Lending

This webinar will be a discussion on understanding what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

Politics & Money

Federal authorities expand investigation into all-cash real estate deals

Investigation to continue through at least May 2020

The federal government’s nearly four-year investigation into whether foreign buyers are using shell companies to buy U.S. real estate in order to launder money will continue for at least another six months.

The Treasury Department’s Financial Crimes Enforcement Network, which has been investigating all-cash luxury real estate deals since January 2016, announced Friday that it is extending its investigation until May 2020, at least.

The initial FinCEN investigation looked into whether unknown buyers were using shell companies to buy high-end real estate in Manhattan and Miami-Dade County, because the government was “concerned about illicit money” being used in the deals.

The results of that initial investigation showed more than 25% of transactions reviewed involved a “beneficial owner” who was also the subject of a “suspicious activity report,” which is an indication of possible criminal activity.

From there, FinCEN expanded the investigation several times. First, FinCEN began looking into all-cash real estate deals in Los Angeles, San Francisco and several other areas. The investigation later expanded again to include wire transfers.

Throughout the entire investigation, the burden of identifying the actual buyer has been placed on title companies, which have been required to report on the person behind shell companies on all-cash deals.

In its initial phases, FinCEN focused on luxury real estate, setting the reporting thresholds for title companies at $500,000 or above. In Manhattan, for example, title companies were only required to identify the actual person behind shell companies used to pay all cash on deals of $3 million or more.

But, last year around this time, FinCEN expanded the investigation again, both lowering the reporting threshold and adding new cities to the investigation.

In November 2018, FinCEN ordered title companies in Boston, Chicago, Dallas-Fort Worth, Honolulu, Las Vegas, Los Angeles, Miami, New York City, San Antonio, San Diego, San Francisco, and Seattle to report on the person behind shell companies on all-cash deals of $300,000 or more.

Those orders were set to expire in May 2019, but FinCEN later extended the orders through November 2019.

And now, the agency is expanding them again.

Beginning Nov. 12, 2019, and extending through May 9, 2020, title companies in the aforementioned cities will all be required to identify the person behind shell companies used in all-cash real estate deals of $300,000 or more.

The new orders are identical to those issued in May 2019 with one exception: title companies will not be required to report on purchases made by legal entities that are U.S. publicly-traded companies, as real estate purchases by such entities are identifiable through other business filings, FinCEN said.

According to FinCEN, the orders “continue to provide valuable data on the purchase of residential real estate by persons possibly involved in various illicit enterprises,” and extending the orders will “further assist in tracking illicit funds and other criminal or illicit activity.”

In extending the orders for another six months, FinCEN said that it “appreciates the continued assistance and cooperation of the title insurance companies and the American Land Title Association in protecting the real estate markets from abuse by illicit actors.”

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