UPDATE July 1: Last night the Senate approved the extension and the bill is now on its way to the President for his signature. The approved bill extends the closing deadline for qualifying transactions to September 30. The bill does not extend the April 30 date for having a binding offer, only the period of time with which to close the transaction.

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Last night the House of Representatives passed a bill that included extension of the tax credit closing deadline to September 30. The bill now goes to the senate.

As was the case with last week’s Senate approved measure, the closing deadline extension is attached to a broader piece of legislation.

Whether or not the Senate will agree with the House on the broader bill is unclear at this time.

In our office, we continue to operate on the assumption that the closing deadline will not be extended.

The hoped for extension of the closing deadline for the Federal Home Buyer Tax Credits failed to pass the Senate. The legislation to extend the closing deadline was attached to a larger bill that among other things would have extended unemployment benefits. Yesterday that bill was defeated.

According to UPI, the National Association of Realtors estimates that 75,000 will lose the opportunity to claim the credit.

If you anticipate a closing on June 30th, following up on all the loose ends may be a good idea. I don’t believe that any of our closings will be at risk, but many others will.

There are no reports yet of whether supporters of the extension will be able to pass the extension independent of any other legislation.

I’ve been hearing some misinformation about the extension of the Homebuyer Tax Credit closing deadline. Numerous headlines reported that the Senate approved the bill to extend the deadline from June 30th to September 30th. I’ve even heard that some lenders believe that the extension has already been approved. Neither of these reports are exactly true. Here’s what really happened.

Wednesday, the Senate approved adding the bill to extend the deadline to another piece of legislation winding through Congress, namely a bill to extend unemployment benefits among other things. The Senate must still approve this entire bill which isn’t certain, then the bill must be approved by the House of Representatives and then signed by the President.

Assuming that all of this happens on or before June 30th, we’ll be OK. If it doesn’t - well I don’t want to even think about that. We’ll just keep managing our business assuming that deals have to close by June 30th.

It’s always good to remember that whoever writes the headlines, usually isn’t the reporter and probably hasn’t read the entire article.

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.

This is the month to stay on top of your transactions. The matter-antimatter engine that’s been powering the real estate market is reaching critical mass.

The matter is buyers that are counting on getting either of the Federal Home Buyer Tax Credits and must close their transaction by this June 30. The tax credits most certainly accelerated the closing of a lot of transactions that normally would have closed later in the summer, so June will be busier than normal for everyone in the mortgage finance and settlement services businesses.  

The antimatter is now common delays due to inspection issues, appraisal issues, loan underwriting issues, funding approval delays, mail out delays, short sales approvals and wire transfer delays. But this month delaying the closing past month end will not be an option for many. The loss of a tax credit will not be acceptable.

According to the Wall Street Journal the National Association of Realtors is asking that the June 30 date be extended. Here’s the link. http://blogs.wsj.com/developments/2010/06/02/realtors-want-congress-to-tweak-tax-credit-timeline/ If Congress agrees it would be very helpful. I wouldn’t be making any plans counting on this happening though.

So this month, more than ever, stay on top of your deadlines. Keep in touch with inspectors, appraisers and lenders. You don’t necessarily need to be a squeaky wheel, but do make the effort to confirm along every step in the process that loose ends are being tightened up.

Last minute mail outs are sure to risk delaying the closing. Make sure your clients understand that if they are not going to be at the closing, the longer the lead time for preparing and mailing out documents the settlement agent has, the better for everyone.

Attention to the details will avoid the otherwise inevitable dropped balls, resulting delays, and closing encounters of the worst kind.