Escrow & TitleIntermediateArizona Exam

In Arizona, a title company or escrow agent who suspects money laundering in a real estate transaction should:

AComplete the closing as scheduled and send written notice of the suspicious activity to the buyer within 5 business days

BFile a Suspicious Activity Report (SAR) with FinCEN (Financial Crimes Enforcement Network) and follow Bank Secrecy Act obligationsCorrect

CReport the suspicious activity to the ADRE's consumer protection division within 3 business days of discovery

DDecline to proceed with the closing and issue written notice to all parties citing general compliance concerns

Why File a Suspicious Activity Report (SAR) with FinCEN (Financial Crimes Enforcement Network) and follow Bank Secrecy Act obligations Is Correct

Answer B: File a Suspicious Activity Report (SAR) with FinCEN (Financial Crimes Enforcement Network) and follow Bank Secrecy Act obligations

Title companies and escrow agents may have Bank Secrecy Act obligations, including filing SARs with FinCEN when transactions have indicators of money laundering or other financial crimes. FinCEN has expanded real estate reporting requirements.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

People Also Study

Key Terms to Know

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Easement

A non-possessory right to use another person's land for a specific purpose.

State-Specific Concepts

DRE Regulation

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