State & Local Government Policy, Business and Technology

Shady Real Estate Deals Plunge Under New Regulations

Governing: In any hot real estate market, there are complaints about prices being artificially inflated by foreign buyers. That sometimes sounds a little far-fetched. In cities with tens or hundreds of thousands of homes, how many can really be bought up by absentee owners from abroad? Actually, the answer turns out to be a substantial share.

Federal laws designed to prevent money laundering have long had a gaping loophole. Namely, real estate. People or corporations that pay for houses and condos with cash, whether using currency or wire transfers, can evade disclosure requirements. The sellers and bankers involved don’t have to know who the real entities are behind limited liability corporations nominally making the purchase.

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