OfflineA new era in filing requirements is about to begin. For the first time, the Financial Crimes Enforcement Network, known as “FinCEN,” will require nonbank mortgage lenders and originators to implement an Anti-Money Laundering program (“AML Program”) and file Suspicious Activity Reports (“SARs”) for certain loan transactions.
FinCEN is establishing this AML program in accordance with the Bank Secrecy Act (“BSA”).
The guidelines relating to the AML requirement become effective on April 16, 2012, and the AML Program’s effective compliance date is August 13, 2012. The AML program and SAR filing regulations, which I will refer to as “FinCEN’s rule,” are considered to be “the first step in an incremental approach to implementation of regulations for the broad loan or finance company category of financial institutions.”
The Bank Secrecy Act defines the term "financial institution" to include, in part, a loan or finance company.
This terminology, however, can reasonably be construed to extend to any business entity that makes loans to or finances purchases on behalf of consumers and businesses.
Thus, nonbank residential mortgage lenders and originators, and mortgage brokers, are grouped into the "loan or finance company" category. However, the term ‘‘loan or finance company’’ is actually not concisely defined in any FinCEN regulation, and there is no legislative history on the term itself. Nevertheless, FinCEN is applying this term to extend to any business entity that makes loans to or finances purchases on behalf of consumers and businesses.
JUST BE AWARE OF THIS NEW REGULATION THAT COULD TRIP YOU UP IF YOU ARE INVOLVED WITH OWNER FINANCING.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
for sharing this important piece of information. I need to better understand this. So does this mean transactional funding is going to be more of a problem, or it has nothing to do with that? Can you better explain how it affects owner financing? Tammy
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That is very good information to know!! Thank you.
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it would be my OPINION that transactional funding wouldn't be included as part as your responsibility, buit it may have to be included form the TF source. But if you offer owner funding (eg. second mortgage) then the burden may be on you as well.
Always Looking to Acquire Houses | Always Looking to Amaze Investors
That makes sense. Thanks for sharing this. Tammy
www.tw4homes.com website
https://tvallc.isrefer.com/go/RehabLite/reigirl/ FREE SOFTWARE FOR WHOLESALERS, REHABBERS AND AGENTS! Present professional looking deals to buyers and lenders as well as run your numbers and get the ROI.
for always keeping us informed!
I thought the anti-laundering regulations had to do with large 'cash' exchanges...
Valerie
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Do you know how this effects private money lending and wrap around mortgages? Is this the beginning of the end for us? What exactly would have to be done for us to continue to do owner financing deals, wrap arounds, and private money loans? Do you know?
I do not know the exact effect it is going to have on owner financing. Until I have the opportunity to go to a finance class that explains the details of the language and reports on workarounds, I am not doing anything different right now. But I am aware that there may be changes and will report information as soon as I get some details.
Always Looking to Acquire Houses | Always Looking to Amaze Investors