Fintrac and real estate
This news release regarding Fintrac just came across my desk so I thought I’d share:
Federal law requires REALTORS® to verify client identity
REALTORS® across Canada are now required to collect personal identification information from their clients in order to comply with federal legislation.
These new federal laws and regulations took effect June 23, 2008 and are aimed at combating money laundering and terrorist financing activities. As part of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), financial institutions and REALTORS®, among other professionals, must identify customers who conduct financial transactions.
The regulations are enforced by the federal agency known as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.
Under the new rules, REALTORS® must obtain, record, and retain the personal information of their clients, including their full legal name, address, date of birth and occupation. To do this, they require a government-issued identification document such as a driver’s licence, passport, or residency card.
REALTORS® are to track the amounts and source of funds received during the course of a real estate transaction. The Act also requires these identification records and FINTRAC reports be kept for five years.
“The public needs to be aware that REALTORS® are asking for this personal information to comply with the new federal laws,” said Dave Watt, president of the Real Estate Board of Greater Vancouver (REBGV). “The information received will not be used in any commercial way and will not be provided to anyone else except in response to a request from the federal agency responsible for compliance.”
If the client is a corporation, that information must include corporate documentation and the names of the corporation directors. REALTORS® are further obligated to ascertain whether a third party is involved in a given transaction.
These new compliance requirements affect even a buyer or seller not using the services of a licensed real estate practitioner or lawyer. If there is a REALTOR® involved in the transaction, he or she must make the best effort to verify the unrepresented private buyer or seller’s information.
Also under the new FINTRAC regulations, REALTORS® need to verify the personal information of clients with whom they have no face-to-face interaction. One way to do this is for the broker office to hire an agent in the area where the client is located. That agent must then meet the client, verify the identification of the client, and provide the information to the office actually handling the transaction in Canada.
28 comments
Fake ID detector, anyone?
check out!
http://vancouver.en.craigslist.ca/rfs/748205147.html
down town condo at 500/foot .
awesome…..
i got the link from a post on fishy.
Doesn’t mean squat. Money launderers often have their go-to realtors for their transactions. And the police know it.
And if they don’t have such a realtor, fake IDs are a dime a dozen. After all, Vancouver’s international reputation as a money laundering hub is right up there with it’s reputation for fraud.
“down town condo at 500/foot .”
Still way too much.
Not to mention all facets of the gov’t can be bought, happens all the time…. All the way to the PM all it takes is a bigger cheque ( actually only accept cash)
Posted on last thread:
Last year when rates were climbing there was a surge of sales through the summer and fall while pre approvals for lower rates were being taken advantage of.
That was last year and we were in a sellers market.
The buyer was the one feeling the pressure to get in before it became more expensive.
Now this summer things are different.
We are clearly in a buyers market and sellers are being pressured to drop prices to make the sale. I think we could conceivably see sellers panic more than buyers this time and start to see some serious downward pressure on prices. We aren’t the only ones seeing prices drop and the market weaken. EVERYONE I talk to is seeing the same thing.
“REALTORS® are to track the amounts and source of funds received during the course of a real estate transaction.”
Rob,
In the following example, guess the REALTORS® has to keep detailed notes on savers
Buying $600,000 home in East Van
$200,000 cash deposit from savings
(remember the days of 1/4 to 1/3 downpayment?)
Source of savings:
young couple, each working 5 years and saving
each working 2 jobs
renting cheap ugly basement suite in rough neighbourhood
kraft dinner meals
no cable (only has CBC and Global TV from rabbit ears)
no internet (goes to library to check in on Chipman blog)
reads free Metro and 24 Hours newspapers
no vacations
no dining out
no movies
shops at value village
no car, just buys monthly bus pass
Is FINTRAC going to “look closely” at these guys because they were good savers? Is FINTRAC going to want to see the purchasers tax returns, bank records, investment accounts?
Dignan – Rob is NOT seeing price declines. Remember that – it is a clue.
WoW,
Rob has been expecting to see price declines the past two months. He Also disregarded the huge drop in average price we saw back in April or May saying that the average bounces around a lot and is meaningless. Now that the Benchmark dropped in June he quotes the Average as still going up so prices are not dropping.
I’ve been reading this blog for quite a while now and have come up with two conclusions.
1) Rob will never agree with anything anyone says but will later rephrase the statement and think it original
And…
2) Always quote Rob directly. If you don’t quote a statement that he has made word for word, he will disregard what you have said and back peddle his way out of saying he is wrong….. oh yeah
3) Rob is never wrong….. according to him.
P.S. I’ve recommended Rob to several people i know because i think he is good at what he does and I respect his opinions and insight. So Rob no offense. You are one of the smart ones.
Please excuse my ignorance… Couple of questions… about this release by the Department of Finance Canada: Residential Mortgage Insurance: http://www.fin.gc.ca/news08/data/08-051_1e.html
- When did 0% down first come into play?
- What was the prior official standard as far as allowable percentage of gross income on a mortgage payment (please see RentingSucks comment below from: https://www.blogger.com/comment.g?blogID=31427364&postID=1034922603426155134)
-RentingSucks : “Monthly dollarwise though I think the 45 percent Gross Debt Service Ration (GDSR) where you can actually spend the full 45 percent of your gross income on a mortgage (assuming good credit and no other debt) is the most significant change. Previously the mortgage portion of this amount was restricted to 32 percent. If your making 60000 that’s $650 dollars more a month you’re allowed to spend. About $100,000 more mortgage.”
$fromA$ia: What’s the difference between 5% down and 0% down?
On $500K that’s 25K which is nothing to sneeze at. I think these minor changes will have a substantial impact. I’m guessing a lot of the people taking advantage of the forty year mortgage and 0% down don’t have the means to save any kind of down payment and were simply looking at the monthly cost of owning… You know, the old ‘why pay rent when you can own’ saying…
Rob: “Government lack of regulation fanned the flames? I love that. I guess we need more CHMC control over what lower income Canadians can buy. That’ll certainly keep the rich in line. I can only wonder why we didn’t think of that earlier!”
LOL! Yeah! But seriously though… The banks (regulated by government) can’t (well, they can actually) just keep giving away free money (well, almost free) to whomever they want. The price of everything is over inflating…
These new regulations are a joke. It’s like closing the barn door after all the horses have escaped. The market is already correcting. Government really doesn’t have a clue. The high prices have already started to mitigate the 40 amort and 0% down. If you are making $30,000 and try to buy a $500,000 mortgage, with 40 year amort with 0 down you would still not be able to get approved. Now, however, the government can claim it’s not their fault when the market crashes. Which it will.
How do I know for sure? When industry heads and banks keep and repeating over and over again that we are headed for a soft landing it means we are headed for exactly the opposite. I remember two days before Bear Sterns went down the CEO said everything was hunky dory. I just feel sorry for all the people that listen to this BS.
rob:
could you please provide me with some identification?
thank you.
hey you just never know…i’m just sayin’
Check out Paul’s numbers! Listing still have some steam. Gained 200 today for a S/L of 20%.
If you are making $30,000 and try to buy a $500,000 mortgage
Just a nitpick, the borrower sells the mortgage, the lender buys it. Just like any other debt instrument.
I’ve implemented a related set of requirements for opening bank accounts online. All users will be asked whether they are a ‘Politically Exposed Person’. If so, they are expected to flag themselves as a PEP. Financial transactions for PEPs aren’t being tracked yet, but that is the next logical step.
Are you a PEP? Are you sure you haven’t accidentally been flagged as a PEP? Is there any reason to worry that the scope of investigative activities could extend beyond tracking terrorist financing and proceeds of crime?
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