Similar to the UK's recent focus on ownership transparency, geographic targeting orders (GTOs) require title insurance companies to collect and report information about the persons involved in certain real estate transactions. The purpose is clear... to provide transparency for real estate transactions that are high risk as money laundering or tax evasion vehicles.
Unfortunately, because GTOs are limited to few geographic areas, it is likely that the reduction in cash-for-property transactions in South Florida, as discussed in this article in the Miami Herald, demonstrates a move to other methods or regions operating under less regulatory scrutiny.
The question, and risk, for real estate and title companies is where.
Regulators “shined the spotlight and at the very same time these buyers have scurried away back into the shadows,” said Sean Hundtofte, one of the co-authors of the study, which analyzed millions of home sales nationwide collected from local property appraisers and other sources by the online real estate firm Zillow. The staggering fall in transactions may give ammunition to federal officials who argue that secretive real estate deals allow criminals to launder stolen money into the condos and mansions sprouting up around South Florida. Those officials want to see the rules made permanent and expanded nationwide. But the study also reveals the difficulties regulators face in catching those determined to worm their money into the U.S. financial system: Money launderers are skilled at evading the latest traps set by authorities.