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June 22, 2010

Home buyer tax credit extension up in the air

Some of you are waiting on tenterhooks to hear if Congress will allow homebuyers more time to close on deals signed by April 30 with the expectation of a $6,500 or $8,000 tax credit, so I checked in with the National Association of Realtors for an update.

Trouble is, the amendment the Senate approved last week -- which would push the June 30 closing deadline to Sept. 30 -- is attached to a bill that is far from a sure thing.

The American Jobs and Closing Tax Loopholes Act "is a Christmas tree, it’s got everything in it, all kinds of stuff, and it looks like that bill is going to have a really tough time to be moved in the Senate," said Lucien Salvant, a spokesman for the Realtors group.

"The Senate has failed twice now to end debate on the major jobs creation bill, so I’m not sure what’s going to happen," he said.

The trade group believes that as many as 180,000 buyers are in danger of missing the June 30 closing deadline, many of whom are trying to settle on short sales -- notoriously not short when it comes to the time involved.

Even if the Senate does approve the overall bill, it will have to go back to the House for a vote, Salvant said.

The Realtors are hearing no objection for the extension from House leadership, he said. So he thinks it will happen. "But I don't know when," he said.

Comments

I hope that this does get approved and Congress get's it's act to together. A number of my readers are really hoping for the extension of this credit's filing date.

It would make the most sense to not extend it. Why give away more free cash to those who have already signed on the dotted line? Individual that choose not to close over the loss of the tax credit probably did not need to be buying a home anyway. I really hope they do not extend it and send a statement that the life support for the housing market is finally over.

Personally I want this to pass, I put a bid on a house back in February then within a week it went into a short sale finally in May I got the approval letter from the bank and should have closed in June but for some reason I have had trouble finding a lender for a manufactured home on a "site condo property" something to do with the zoning, I have great credit and excellent rent/payment history & closing was set for Friday but again as of today I am looking for a lender that will approve the loan, so extending this tax credit would give me an extra 3 months to buy the house I want and get the money I should already have.

mandy- Go on zillow.com market place. You will find many lenders and brokers who can help you. Just put in your quote request and you will find someone to get it done. Just make sure you specify what the issues in the details. United Wholesale Mortgage will do manufactured housing so you may want to check them out.

I hope they do extend this. I personally do income taxes for a living. I also have a son that did a sales agreement on April 27th and is just ready to do the close any day. Each time they are asked for something or to do something they are met with one more request. This has been going on for two months. They are so stressed out over this whole ordeal. I don't think its a matter of not giving out any more free money but a kick in the butt for those who have been doing flipflops, like my son, trying to close on a house that is truly out of his hands. I don't think three months is necessary but a good one more month would be a great relief for these people who are committed to a purchase in hopes of getting a tax credit too help with the purchase price or fix ups to now maybe having the house but no credit. In my sons case he signed a sales agreement on a house that currently had renters in it. If he backs out now because of the credit being disallowed he will lose his down payment, the appraisal money plus have tax consequences for rent money that the homeowner has lost. My son has done everything the lending company has asked for and still is right at the cutoff even though he has had two months to close. I truly feel bad for every new to be homeowner going thorugh this ordeal. It truly is overwhelming and so nervewracking. This truly would be a just cause for the honest person trying to oblige with the lending companies in purchasing a home to get a credit they deserve from the government.

Yes, loans are jammed up and underwriters aren't able to get these deals done in time. Unusual for underwriting to take months but in many cases, it is. While nothing is ever for sure in real estate until the deal closes and records, it seems unfair to promise a tax credit if conditions are met, only to have them yanked out from under us through no doing of our own...just too much dough in the bowl.

I had a house under contract well before the April 30th deadline. It was a bank owned property and I have more then enough money down, credit and income to support the purchase, however when the appraisal was done it was not priced "as is". The appraisal was based on a bunch of cosmetic repairs needing to be done such as new paint, yard maintenance (it's desert landscaping) and new carpet because the old carpet is stained. I was personally going to do all the above and more to the house since it needs minor cosmetic repairs. If they do not extend the home buyers credit I will walk away from this purchase. I have to reason to buy a house that I will have to sink over $10,000 in repairs. I will just go rent a home and watch the housing market go down more which it is going to do IMO. I am in Las Vegas, with our economy shrinking and people moving away and the glut of overbuilding I see no other alternative.

For all who say they are sick of their tax $$$ going to deadbeats, I pay well over $8,000 a year in federal income taxes. I am a single man with a decent income and no real deductions. I think I paid $12,000 last year in income taxes, not SS, not state, just federal income.

I feel the tax credit should be extended for those individuals that met the deadline of April 30th with a fully approved sales contract AND have lender approval.....there is a REAL bottle neck with the approval process in home mortgage loans today and the consumer should not be penalized for the delays that are trully out of their hands. I vote yes to the extension!!!!

I'm in the exact boat that Megan and other have described above- we signed our contract several days before the April 30 deadline, and have had loan approval for nearly 2 weeks now...still waiting on the underwriters. Our lender assured us last week that we would meet the deadline, but now she says that because the underwriters are so swamped, we'll be cutting it close, if we make it. Sure, we could have pushed to get the loan approved even earlier, but everyone in the business told us we were fine, and there would be plenty of time to close by the 25th... Hoping for an extension so we can schedule our closing at a convenient time for ourselves and the sellers, not just whenever the title company can fit us in...

Allison, see here for newer details: http://weblogs.baltimoresun.com/business/realestate/blog/2010/06/home_buyer_tax_credit_extension_bill_fails.html

If you can manage to schedule your closing by June 30, you'll probably want to.

I agree with the extention I entered into a contract befor april and are now on my second continueation we are waiting for the tile company nothing to do with my fault or the seller I am putting money down on my loan and was hoping for the tax credit to make improvements.

Thanks for the further information Jamie. We are really hoping to close before then, but everything is out of our hands until the underwriters are done. The reason I mention scheduling at our convenience is that one of the sellers is defending his PhD thesis on the 30th, so he's really going to have a time crunch if closing gets scheduled that day, which was why the 25th sounded so appealing to all of us (but obviously that didn't actually work out). Still hoping we hear back by the end of the day and can schedule for Monday or Tuesday!

I hope and pray that they pass the extention. My husband and I are first time home buyers. We found a house that we can afford, not what the bank said we could afford, but what is in our budget. We signed buy April 30 for the dead line. We are looking forward to using the $8,000.00 to help with extra expensives to fix the house up. The house was in forclosoure so it needs a lot of TLC. We have done everything that has been asked of us, from the bank when it was asked and let me tell you that has been a lot of stuff. I was just inform today June 28 that there is no way it will be done in underwriting in time for the deadline. I can't tell you how stressful and exhausting this has been not only on me and my husband but the whole family. We will still go through with buying this home, but the credit would help us out a lot. It just always seems that the people in this world who do what they are suppose to do meaning work for a living, pay their bills, pay taxes, and try to do good always end up at the end of the line. One more thought if they extented the credit it would also help out the economy.

We signed our contract on March 17th and have jumped through hoops with everything the banks have asked for. My wife an I make good money, credit is good as well. Like I said, we have complied with everything asked of us and we are now going on 4 months. We are finally closing in two weeks so this extension would be warmly welcomed. Not our fault the banks could not get their end of the job done in time. I realize they are swamped but come on, four months.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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