The Patriot Act has affected more things than the average American knows of or will know of.One thing is real estate. The Act has been designed to protect us from terrorist or illicit activity on both large and small scales.I have no problem with the requirements of this Act assuming it could prevent us from just one bad thing.

     Under the Act, when purchasing real estate, one could be identified as a “high risk applicant”.High risk is defined as someone who has connections with a Non Eligible Country listed in the Anti-Laundering Program. Another high risk applicant would be someone defined as Politically Exposed Person (PEP).A PEP is defined as a current or past senior political figure, member of the immediate family or close associate of a party member or state owned corporation.

     This loan application must be reviewed by management and underwritten manually.The underwriter is supposed to obtain as much documentation as possible concerning employment, income, assets and credit history.Identification must be supported by passports visas and other tax documents.The applicant is to provide letters of reference, be completely checked out and researched.You would hope, but I doubt, the process would catch, stop or deter illicit persons from buying real estate.

     I have had one or two suspicious characters in my career apply for loans.I decided on my own(paranoid Nazi hunting terrorist watching self) not to do the loans, but did not turn them in.One guy was from a country on the suspicious list and another was living in another country trying to refi a condo in NY to get money for his “business” in Africa. I was not comfortable with them and declined.Was I supposed to turn them in?

     My question is what happens if they turn out to be suspicious?Does the bank turn the file over to the Feds or just reject the loan and forget about it?Do we have a human rights issue on our hands if the person is not a terrorist?Will they blow up the bank office if they get rejected from for the loan? I am not sure and guess I will have to do some research on this topic.
Be comfortable to know that there is one mortgage broker out there that will not do a loan just to get paid!!
-Dale Siegel