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For months, a lot of title shops have been operating under the same unofficial project plan:
“Wait.”
“See what the lawsuit does.”
“Panic later.”
Well… later is now.
On February 20, Judge Wendy Berger adopted the magistrate judge’s recommendation and granted summary judgment in favor of FinCEN. In plain English? Fidelity’s legal challenge to the Residential Real Estate Reporting Rule didn’t stop it. The rule stands and the industry’s “maybe this goes away” exit ramp just closed.
This isn’t a “maybe.”
This isn’t a “we’ll see.”
This is happening.
Now the question isn’t whether the rule survives.
The question is whether your agency is ready by March 1, 2026.
What This Rule Actually Does
The FinCEN Transparency in Residential Real Estate Rule is an anti-money laundering (AML) regulation targeting certain non-financed residential transactions.
Real Estate Is a Known Money Laundering Tool
The federal government has identified real estate as a common method for laundering money.
Here’s how it works:
Illicit funds are used to purchase property.
The property sits for a period of time.
When it’s sold, the proceeds look like legitimate escrow funds.
Dirty money re-enters the banking system looking clean.
The goal of this rule is to detect and interrupt that process.
What do we have to do differently in production so we don’t get crushed by this?
Who Has to Report?
FinCEN calls them “reporting persons.”
That includes:
Title insurance agents
Settlement agents
Escrow agents
Attorneys performing closing or settlement functions
Responsibility follows what’s called a “reporting cascade.”
The party most involved in closing the transaction bears the responsibility—unless there’s a written agreement designating someone else as the reporting person.
Wicked translation: if your shop touches closings, assume you’re going to be pulled into this—either as the filer or as the party everyone stares at when nobody wants to be the filer.
What Transactions Are Reportable?
Reports are required for:
Non-financed transfers (all-cash or financed by something other than a traditional bank)
Of residential real estate
Where the transferee (buyer) is a legal entity or trust
For clarity, because don’t we all just love to have another label for the same party:
The transferor = seller
The transferee = buyer
Buyer status determines reportability.
Seller status does not.
But if a transaction is reportable, you collect information on both.
Wicked Title Forum is a reader & sponsor-supported publication. This post is free for you to read thanks to their generous support and belief in our mission. If you enjoyed this article and want to ensure we continue to create valuable content for the title insurance industry, please consider supporting us…
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Does Residential Mean What I Think it Means?
This rule isn’t limited to “suburban single-family with a picket fence.”
“Residential real property” includes:
1–4 family residences
townhouses, condos, co-ops
small 1–4 unit buildings
certain vacant land if the transferee intends to build a 1–4 family structure
Nationwide.
No geographic carveouts.
What Do You Have to Report?
Get ready to get up close and personal with your buyers and sellers. You might need to ask for the color of their underwear, but it’s going to feel like it.
The reporting person must provide:
Property details
Total consideration paid and payment details
Buyer (transferee) and Seller (transferor) information including names, addresses, tax identification numbers, citizenship details and more
I can hear the suspicion in your voice as you’re already asking, “What kind of more?”
That’s going to vary depending on, stuff, but it could include:
Information about the person who will be signing the paperwork because that might not be the owner or trustee.
Who owns the trust or the LLC and details about those owners.
Is the trust owned by an LLC which is owned by another LLC? Shell companies are like Pokemon - gotta catch ‘em all.
FinCEN provides a read-only view of the Real Estate Report form so you can see the structure without guessing. RER Form (PDF)
How & When Do You File?
Reports must be filed:
Online through the BSA E-Filing System
Within 30 days of settlement
Or by the end of the month following closing, whichever is later
Oh, and you need to register to use the BSA e-Filing System, so go do that now. Don’t wait until the 31st of the month following your first reportable transaction.
Reasonable Reliance (With a Catch)
You are allowed to rely on information provided by other parties—if it is certified as accurate by the transferee.
To make this perfectly clear, you MUST add something to your closing package that will be signed by the parties who gave you information stating that the information is true and correct to the best of their knowledge. If you really want to get fancy, you might toss in some indemnity and hold harmless language just for funsies.
Also, you can’t un-know what you know. If something is obviously inconsistent, “we were told” is not a magic shield.
Recordkeeping: Five Years
Reporting persons must retain:
Any required beneficial ownership certification
Any designation agreement altering the reporting responsibility
Any certification used for your “reasonable reliance”
For five years.
Most of you should be keeping all records longer than because of state record retention requirements, so this is probably the least onerous of the obligations.
Finally, FinCEN notes you’re not required to retain a copy of the report itself (though many operations may still choose to for internal audit defensibility). Personally, I would keep it all.
Does anyone know? Can we charge cloud storage fees at settlement? Is that a thing for anyone? I feel like it should be.
What title agents should do now (this week—not “someday”)
You’ve been in the “wait and see camp” for the last year, you’re probably behind the eight ball and entering panic mode now.
So let’s take a breath and start small with these 3 steps:
Decide:
Who is in charge of flagging potentially reportable files.
Who is in charge of collecting the information on a reportable file.
Who is in charge of getting a reasonable reliance form signed at closing
Who is in charge of filing the report
If you don’t have a secure client portal for exchanging sensitive data, go get one, like yesterday. Seriously, you should already have this. Emailing social security numbers is not ok.
Set aside some time for each of them to do some training on their part of the process.
As for that training, if you aren’t a member of the Wicked Title Knowledge Base, get signed up. We’re updating and publishing the fully revised Title Agent FinCEN Compliance Guide—including:
Quick-reference reporting flowcharts
Reporting cascade breakdowns
Staff training slide decks
Beneficial ownership intake templates
Certification language
Designation agreement templates
Entity screening checklists
Client communication scripts
Recordkeeping SOPs
Everything you need.
Nothing you don’t.
If you’re not a member yet, now is the time.
Because headlines tell you what happened.
Members learn exactly what to do next.
Sources:
Wicked Title Forum is a reader & sponsor-supported publication. This post has been free for you to read thanks to their generous support and belief in our mission. If you enjoyed this article and want to ensure we continue to create valuable content for the title insurance industry, please consider supporting us…
🔔 Upgrade Now | 📢 Be a Sponsor
Brought to you by: 🧱 Brickhouse Consulting, 🔒 Closinglock, 🖊️Dotted Line Signings, 🌍 Foreign Tax CPA, 🤖 Talos Title AI, Razi Exchange & Our Paying Readers
Stay Wicked,
Cheryl
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