FIRPTA, FinCEN & Fakes

Dear Members,

I haven’t sent a blog in several weeks because there wasn’t much new to talk about. But time is running out on my remaining tenure at The Fund, so I decided to go ahead and post some thoughts about FIRPTA, FinCEN, and fake title agencies...all things you already know about. Otherwise, my only option was to go convert my grandson’s crib into a toddler bed……..

FIRPTA Nonsense. It seems like everyone was in a tizzy over FinCEN until two weeks ago, when we all woke up to the Executive Order President Trump issued in March about payments from and to the Federal Government. Basically, the Executive Order says that payments from the Federal Government will no longer be made by check, but will be made electronically. This is effective September 30, 2025. The Executive Order goes on to say that, “as soon as practicable,” all payments made to the Federal Government must also be made electronically. No longer will checks be accepted. Well! This sent everybody into a tailspin over payments made from closings in compliance with FIRPTA. There is a lot of discussion and debate about how this will be handled — specifically, whether closing agents will be allowed to remit the required payment on behalf of a buyer. All sorts of options are being explored, and we are hoping further guidance is forthcoming soon. (I hope you didn’t expect an answer at the end of this long paragraph — because I don’t have one. But be assured that the finest brains at The Fund are looking into this, and we hope to have some further guidance for you soon.)

FinCEN Residential Reporting Rule. Join our Legal Education experts at our next FinCEN Town Hall — it’s on September 4, from 12:00 to 1:00 PM. We’re calling it Form Follows Function: A Title Agent’s Guide to Collecting Information for FinCEN. In this Town Hall, Jay St. Lawrence, Kara Scott, and Michael Rothman will review ALTA’s Collection Forms, as well as the Intake Forms that The Fund has prepared. They will also address how Members might best approach collecting the requisite data from the seller and buyer, taking into account real-world practicalities. You will also receive a copy of the Realtor Information Flyer, and the team will speak to the importance of educating real estate agents on the new rule and bringing them into the process. 
Here’s the link to register: https://www.thefund.com/shop/education/webinars/live/form-follows-function

Fake Title Agency Scam. I have told you about this before, but I was reminded of it the other day, so I’m going to pass it along. A new scam is out there in which fraudsters are impersonating existing title agencies by setting up a domain name, a website, and a bank account under names very similar to legitimate title agencies. They identify a property, impersonate the owner, and contact a real estate broker or agent to list the property for sale. A buyer is identified, and somehow the appearance of a legitimate closing takes place — enough to get the buyer to send money, in the form of a significant earnest money deposit, to the fake title agency acting as the escrow agent. At that point, the damage is done. I have been told that the fake title agency has even produced fake title commitments in order to continue the appearance of legitimacy. It is the Realtors who are being duped in this situation, so you should make sure your Realtor partners are aware of this scam! I am trying to learn more about the prevalence of this fraud and how to combat it, so if you have heard of any instances, please pass them along.

That's all for this week.

Stay safe out there and let me know how we can help you!
 

Melissa Jay Murphy
Executive Vice President, Chief Legal Officer,
and General Counsel