FinCEN – Why This Even Matters: The Backdrop

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FinCen US Treasury

FinCEN is moving real estate from spot checks to full spotlight. The new Real Estate Reporting Rule expands reporting nationwide for non-financed residential transfers to entities or trusts—putting title and settlement teams squarely on the front line.

Before we jump into obligations, let’s set the scene.

  • FinCEN (the anti–money laundering arm of Treasury) has been pushing to bring more transparency into real estate, especially when shady actors try to hide behind shell companies, trusts, or all-cash deals.
  • Up till now, the rules (called Geographic Targeting Orders or “GTOs”) forced title companies to report beneficial ownership in certain all-cash deals — but only in certain cities or above certain dollar thresholds.
  • The new regime (the “Real Estate Reporting Rule”) flips that: starting December 1, 2025, anywhere in the U.S., any non-financed residential real estate transfer to a legal entity or trust will potentially trigger reporting. No dollar minimum, no geographic carve-outs.
  • And yes — that includes your title & escrow shops (or any settlement agent doing those functions).

So basically: more deals, more reporting, more compliance burden. Welcome to the new era.

What Title Companies Are Actually Going to Need to Do (Spoiler: It’s More Than Just Filing Forms)

Let’s break this into “before closing / at closing / after closing” so you can see the workflow impact.

1. Upfront and Pre-Closing

  • Know your role & assign responsibility. The rule states that one of the parties performing “closing or settlement functions” is responsible for making the “Real Estate Report” to FinCEN. That might be your company, or a partner — but you’ve got to decide.
  • Collect more data from buyers/parties. You’ll need precise info about beneficial owners of any legal entity or trust that is buying property (name, address, date of birth, ID number, ownership %, etc.).
  • Require certifications / representations. Because you can’t always verify everything yourself, the rule allows you to reasonably rely on info given by the parties — but only if they sign written certifications declaring accuracy.
  • Train your staff & systems. You’ll need to get your team ready to spot when a transfer is “reportable,” know which transactions are exempt, and properly gather & store required data. That means updating your intake forms, your title/escrow software, checklists, etc.
  • Categorize exemptions. Not every transfer is reportable. The rule carves out exemptions (e.g., transfers in probate, certain regulated entities, etc.). You’ll need clarity on which transfers you can safely skip.

2. During & At Closing

  • Trigger check. At closing, you or your partner must determine: is this a “reportable transfer”? (Is it residential property? Is it non-financed? Is the transferee an entity/trust? etc.)
  • Fill out the Real Estate Report. This is FinCEN’s prescribed form. You’ll report details about the property, the parties, the beneficial owners, and how the transaction was funded (even if no financing).
  • Meet deadlines. The report is due by the later of: (a) the last day of the month following the month of closing, or (b) 30 calendar days after the closing.
  • Document retention. Even if the Real Estate Report itself doesn’t need to be kept forever, you do need to keep the certifications, designation agreements, etc. for 5 years.

3. Post-Closing / Ongoing

  • Audit readiness. Because regulators might ask to see your filings, processes, and backup documentation, be ready for reviews.
  • Update certifications if changes occur. If beneficial ownership or relevant data changes, there may be a duty to update or correct.
  • Risk of penalties. Noncompliance isn’t a joke. You could face civil or criminal sanctions under the Bank Secrecy Act if you willfully fail to report or make false statements.

What Makes This Hard (and Why Title Companies Are Nervous)

Because, of course, implementing a new federal compliance regime isn’t like just adding a checkbox.

  • Massive increase in volume. Under the old GTOs, only certain cities or high-dollar deals were monitored. Now it’s everywhere, regardless of price. That’s a lot more transactions to assess.
  • Data collection burden. Getting personal data (DOB, SSN or ID number) from buyers, especially entities and trusts, may raise privacy concerns or friction. Some clients might push back.
  • Liability from relying on third-party info. Because you’re allowed to rely on what a party gives you, but only if it’s “reasonable” — and if they lie, you could get dragged into disputes.
  • Technology gaps. Your current title/escrow software might not support the data fields needed, flagging logic, or automated uploads. You’ll likely incur costs to update or buy new modules.
  • Training & human error. Even well-intentioned staff might miss triggers, misclassify a deal, or forget the five-year retention of docs.
  • Coordination across parties. In many deals, multiple entities (escrow, title insurer, agent, attorneys) are involved. Who “owns” the reporting duty, and how do you coordinate?
  • Regulation evolution & uncertainty. Some parts are still being clarified. And regulators might tweak or reinterpret things later.

Why This Isn’t Just More Annoyance — It’s a Strategic Shift

Let me zoom out: this changes the game for title companies in a few deeper ways.

  • Transparency & deterrence. One goal is to make it much harder for bad actors to use shell companies or trusts to hide money in real estate. That means title companies become gatekeepers in preventing money laundering.
  • Cost of compliance becomes part of doing business. Expect to see higher overhead (staff, tech, audits). That could pressure margins, especially for smaller companies.
  • Competitive advantage for those who adapt well. Firms that build clean, efficient workflows — and market themselves as “FinCEN-compliant, low risk” — could win trust and business.
  • Reputational exposure. A title company caught skipping or messing this up might face not just penalties, but reputational damage among lenders, regulators, clients.
  • Potential need for partnerships. Some title companies may outsource or partner with compliance vendors, data verification services, or FinTech tools to lighten the burden.

What Title Companies Should Be Doing Now (Even Before Dec 2025 March 2026)

Don’t wait — here are steps you can start taking now to prepare:

  1. Gap analysis. Audit your current intake forms, workflows, software, and see where you fall short.
  2. Train early. Educate your leadership, legal, operations, closers, and IT teams on what’s coming.
  3. Vendor review. Check if your title/escrow software vendor is ready (or planning) to support the Real Estate Report workflows & data fields.
  4. Revise engagements. Update your engagement letters, closing instructions, seller/buyer questionnaires to include beneficial owner disclosures and certifications.
  5. Policy & SOP drafting. Build your internal procedures (who escalates what, how to verify, how to retain documents).
  6. Lean on trade groups. ALTA, state/regional title associations will likely release templates, best practices, and sample forms.
  7. Test runs / dry runs. Before the rule is live, try mock transactions, see where pain points emerge, and adjust.
  8. Budget for overhead. Prepare your finance plan: training, tech upgrades, possible hiring of compliance roles.

TL;DR — What It Boils Down To

  • FinCEN is moving from targeted, local scrutiny to nationwide, no-dollar-threshold reporting for non-financed residential real estate transfers involving entities/trusts.
  • Title companies (or whoever is handling the settlement functions) will be responsible for reporting, collecting expanded data, retaining documents, and managing risk.
    It’s not just another checkbox — it’s a shift in how title operations, compliance, and risk management intersect.
  • The smarter you prepare (in tech, process, training, contracts), the less scrambled you’ll be when December 1, 2025 March 1, 2026, arrives.

Please note: Any opinions discussed in this article belong solely to the author, Marissa Berends, and do not necessarily reflect the views of Capitol Lien.

About the Author
Marissa Berends is a Certified Abstractor and Industry Relations Coordinator at Capitol Lien, a nationwide due diligence and risk mitigation services provider. Since joining the company in September 2021, she has earned abstractor certifications in Minnesota, Nebraska, and North Dakota. She is pursuing her Wisconsin Title Examiner certification, which is expected to be completed in Fall 2025.

Marissa is involved with the following groups: Wisconsin Land Title Association’s (WLTA) Convention Committee & Young Title Professionals; Nebraska Land Title Association’s (NLTA) Convention Committee; Property Record Industry Association (PRIA) National Education Committee; Illinois Land Title Association’s (ILTA) Inclusion, Diversity, Equity & Acceptance (IDEA) Committee; and the National Association of Land Title Examiners and Abstractors (NALTEA). 

About Capitol Lien

Capitol Lien empowers real estate and title professionals with trusted public record research and due diligence services nationwide. With 35 years of experience, Capitol Lien specializes in fast, accurate property and title searches, lien reports, and document retrieval that help title agents, underwriters, and legal teams operate their businesses with confidence. The Capitol Lien team takes the hassle out of title research with local experts and innovative tools that make it easier to mitigate risk, stay on schedule, and keep your closings moving smoothly.

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