Mortgage & Real
Estate
"Frequently cited for inadequate AML programs"
Regulatory Body
FinCEN, State Mortgage Regulators, CFPB
Examiner
IRS BSA Examiners, State Banking Departments
Training Frequency
Annual minimum; role-specific training required for loan officers and processors
Regulatory Landscape
Mortgage companies are non-bank financial institutions subject to BSA requirements, but they are among the most frequently cited for inadequate AML programs. The most common examination findings involve training that is not role-appropriate and not documented. Geographic Targeting Orders (GTOs) have expanded AML obligations for real estate professionals in certain markets, and FinCEN's proposed rulemaking signals broader requirements ahead.
BSA/AML Obligations
The following obligations apply to Mortgage & Real Estate under the Bank Secrecy Act and applicable FinCEN guidance.
BSA/AML Program
A written AML program covering internal controls, a designated compliance officer, training, and independent testing.
SAR Filing
File SARs for transactions of $5,000 or more involving suspected money laundering or mortgage fraud.
Geographic Targeting Orders (GTOs)
In GTO-covered markets, collect and report beneficial ownership information on all-cash real estate transactions above applicable thresholds.
Recordkeeping
Maintain records of transactions, customer identification, and training for a minimum of five years.
Training
Role-appropriate AML training for loan officers, processors, underwriters, and compliance staff.
Risk Indicators
Red Flags to Watch For
- All-cash purchase with no apparent source of funds
- Third-party payment of down payment or closing costs
- Buyer or seller reluctant to provide identification or beneficial ownership information
- Rapid resale of property at significantly different price
- Transaction structured to avoid GTO reporting thresholds
- Use of shell companies or trusts to obscure beneficial ownership
- Inconsistency between stated income and purchase price
- Multiple properties purchased in short timeframe by same buyer
Curriculum
Training Topics Covered
- BSA/AML requirements for mortgage companies
- Real estate money laundering typologies
- Geographic Targeting Order (GTO) obligations
- SAR filing for mortgage fraud and money laundering
- Beneficial ownership identification in real estate transactions
- Source of funds verification procedures
- Role-specific red flags for loan officers vs. processors
- FinCEN enforcement actions in the mortgage sector
Common Examination Findings
These are the most frequently cited deficiencies in Mortgage & Real Estate AML programs. Addressing them proactively is the difference between a clean examination and a finding.
Training not documented or certificates not verifiable
AML policy not updated to reflect GTO obligations
SAR filing failures for known mortgage fraud indicators
Beneficial ownership records not collected for entity purchasers
Independent testing not conducted or not documented
Get Mortgage & Real Estate AML Training
Industry-specific, NAMLC-verified training through Soflo Consulting and AML Training Center.