The Patriot Act is a Federal law that was designed to try and stop or detour terrorist activities. This law effects real estate transactions by requiring identification disclosure requirements from banks, lenders, mortgage brokers, and escrow agents regarding transfer of title and deposits of cash. The law also requires new disclosure and signature requirements for buyers and sellers of real estate.
The Patriot Act affects all facets of financial transactions, whether that be just opening up a checking account or taking out a loan. It is all encompassing. There is a current ongoing debate over it's renewal in our legislature. Some people believe that it violates an individual's privacy.
PATRIOT Act: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism, Act.
What this means to you: when you open a mortgage loan account we will ask you for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
The information being requested and observed is for compliance with the requirements of Section 326 of the USA Patriot Act implementing customer identification and verification requirements. The information in no way will be used in making the credit decision on your completed application.
Patriot Act Identification for foreign nationals and other individuals who do not hold US citizenship may require more than one piece of identification, often a driver's license and passport will do.
The Patriot Act requires that your identity be verified when obtaining a mortgage loan. After identity has been verified with a government issued photo id, the name is then to be checked to determine whether your name appears on any lists of known or suspected terrorists or terrorist organizations.
The Patriot Act was enacted after the horrific events of 9/11. It was enacted in response to terrorism and to assist in the prevention of money laundering by terrorists.
A lending institution can request more personal information regarding accounts, job, investments, etc... if they require at their own discretion. The principal of the Patriot Act is a good idea although it does draw a fine line between what is necessary to prevent terrorism and invasion of privacy.
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