This is something to keep an eye on. Senator Harry Reid of Nevada introduced legislation to extend the settlement dealine for qualifying for the federal homebuyer tax credits from June 30th to September 30th.

According to the National Association of Realtors, approximately 180,000 homebuyers potentially could miss out on the tax credit if the date is not extended. Due to the loan volume, underwriting, appraisal and short sale approval delays, many homebuyers who were under contract by the April 30th deadline, may not be able to close by June 30th.

The Washington Post reports that the bill is actually attached as an amendment to another bill that would extend emergancy unemployment benefits and other tax breaks. The passage of the broader bill is not certain as of today.

It’s important to note that Senator Reid’s bill only extends the deadline for closing already qualifying transactions. It does not extend the deadline for signing a qualifying contract. The deadline to sign an offer was April 30th and that is not being extended.

I certainly hope that the deadline is extended. The growing bottleneck of transactions as June 30th approaches is quite worrisome. I can’t imagine that any mortgage lender or settlement agent would feel differently.

Regardless, until this bill actually passes, I advise our clients to continue to manage their current transactions as if the bill will not become law. Stay on top of your transactions and their associated deadlines.