Update 7/1/10: They waited until the very last minute, but last night the Senate passed the stand alone bill from the House of Representatives that would extend the closing date to claim the first time home buyer tax credit from June 30th until September 30th. The measure passed the Senate unanimously and President Obama is expected to sign the bill into law today.
UPDATE 6/29/10: It appears that stand alone bills that would extend unemployment benefits and the closing date for the first time home buyer tax credit will be introduced in the house today by Rep. Sander Levin of Michigan. This is a breaking story, more to follow.
Update 6/25/10: The Tax Extenders Bill that the amendment to extend the credit failed to overcome a filibuster by Republicans in the Senate. As of now the closing date for the tax credit is still June 30th.
Developing Story Bill Defeated In Senate: Also Read and participate in discussion here.
There was a tremendous response to a blog that I posted last week regarding the possible extension of the first time home buyer tax credit. We received over 50 comments, most of them from potential home buyers who have a deal in place but are having difficulty closing on their home prior to June 30th.
Almost without exception, these commenters are dealing with servicers, underwriters, processors, and lenders who are severely backlogged because of the huge spike in mortgage volume that occurred prior to the April 30th expiration of the tax credit. According to a video on MSNBC today, as many as 20 percent of those who signed contracts prior to April 30th may not be able to close by June 30 in order to claim the tax credit.
As a result, Sen. Harry Reid (D-NV), proposed an amendment to the American Jobs and Tax Loophole Closing Act of 2010 that would extend the closing date to claim the tax credit three months to September 30th. Earlier in the week it appeared that the bill was unlikely to pass, due to the fact that there are a lot of other provisions in the bill that would extend a variety of other tax breaks and unemployment benefits that would add about $80 billion to the deficit over the next decade.
It now appears that an amendment from Sen. Jon Tester (D-MT) that would reduce the cost of the bill was enough of a compromise to bridge the gap between the parties. Harry Reid called for cloture on the measure, which would end debate and force a vote on the bill. The Senate will likely vote on it before next Monday. If the bill passes, it would go back to the House of Representatives for a vote on the Senate amendments to the bill.
According to reports, Senate Democrats are confident the bill will pass. There are only two weeks before the original expiration date, so Congress will need to move uncharacteristically fast in order to enact this legislation. I will do my best to stay up to date on all the newest happenings with this legislation and pass them along in this space. Stay tuned.
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Nate
June 16, 2010 @ 9:36 am
I really hope that they push the bill. We are probably from the looks of things going to fall in that 20% number. The banks just can’t get things done fast enough to make the deal happen…. Hoping we get that money! It will help buy many things needed for the house! Thanks for the great post!
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Pammy
June 16, 2010 @ 9:41 am
I like to think that the letters i sent to my state’s legislators helped! This is great, I hope it passes!
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LuisaInMiami, Fl
June 16, 2010 @ 12:02 pm
I need this passed becuase my loan is “On-Hold” due to FEMA being in Hiatus. I cannot accept that I loose 8K. I am counting on the tax credit becuase the home needs a new roof. Either I get my tax credit or the deal is off.
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Danielle
June 16, 2010 @ 12:03 pm
I had sent email to senators and congressmen about the bill but haven’t heard anything. Hoping this will pass by end of next week. We were suppose to close yesterday and now it’s pushed back until the 28th.. good luck to everyone.
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nettie
June 16, 2010 @ 12:32 pm
I feel the pain i have been in a contract with a house that is up for short sale in NJ, since feb. and the bank and the realtor is just taking there time. I would hate to loose out on the tax credit because people just tak their time. the house i’m iterested in has been empty for over a year. and the man keeps dragging there feet. I think I’m going to back out. enough is enough. Nobaody with power can help with short sales in NJ
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Family of 6
June 16, 2010 @ 3:55 pm
We settled on a purchase agreement at the end of January and still are waiting for the banks to approve the offer. It’s a potential short sale with a strong offer. Because there are two banks involved it’s a little more complicated. Since we sold our home in January and thought this was going to be much quicker, our family of 6 are still homeless for 5 months and living with very nice extended family. Since we hear it could happen any day, we can’t get into a rental situation. The money that we could get from this short sale would help us pay for the appliances that the disgruntled seller will not include in the house. We feel for the seller’s unfortunate situation, but hope we are able to get something out of this situation. The extension could REALLY help us out! TO add to the stress, July is the redemption date and everyone may lose out!
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Diana
June 16, 2010 @ 5:23 pm
I really hope they extend this!! We’re building a house–signed the original contract in February, but due to quite a few internal errors of the builders, our house won’t be finished until July! So even though we did our part, we still don’t qualify for the tax credit. We could really use that money to buy essentials for the house (like a fridge, lawnmower and garden hoses!!) Keep your fingers crossed!!!!!
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Tutpe
June 18, 2010 @ 8:35 am
If this happens, this would reduce my tension which I am currently facing with the seller who has estate issue. Right now, I am not sure if I can make the deadline due to the complicated processes.
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Jim Sawicki
June 19, 2010 @ 5:58 pm
I have a purchase agreement that was signed in September of last year with two mortgages. Both banks have, at some point, approved the short sale pending the approval of the other mortgage holder. However the windows for acceptance keep alternately expiring before the other bank can finish processing so they keep having to restart their processes over again. It’s absolutely rediculous.
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Caig
June 19, 2010 @ 8:02 pm
We are in a short sale that has been delayed. My realtor tells me that she can close within a week of notification from escrow. We are counting on the credit to the extent that I will have no choice but to forfeit the house without it.
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Keren
June 24, 2010 @ 12:03 pm
My husband and I are in the exact sitation. We have done evrything required for first time home buyers in order to receive the tx credit. We were actually told we would be closing today,and now we are being told something different even though our contract was signed by 4/30 and sched. to close on 6/24. So not only will we miss out on the tax credit we probably incurr other charges trying to find another place to live until this deal goes through. So now (Today)we need to decide whether we should keep going or back out. We are first time home buyers and so far the process has been terrible from dealing with our agent to the sellers agent. I think my husband and are going to reconsider what we used to think was the american dream.
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Josh
June 24, 2010 @ 3:37 pm
My wife and I have had a contract on a house since April 14th. The only thing the underwriter needs is a form from the IRS that states my income. Without this the underwriter will not approve the loan. The IRS has had my tax return since April 4th. They have still not processed it. You have no idea how angry I am over this whole situation.
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chris
June 24, 2010 @ 6:49 pm
i didnt sign my purchaser agreement until may 10, 2010 and i closed on the house june 15th, 2010 i think i should be eligiable for the tax credit. i bought the house thinkin it was over..
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Madison
June 28, 2010 @ 2:38 pm
My husband and I will most likely be part of this percentage also, although we have a “great file” in the view of our first lender.. The deal was still not done. Being set to close on May 28th this has been an extension after extension of waiting and waiting for someone to make a decision on what I believe to be a great deal. losing my house in 2008 to a house fire was terrible and a home for my family and I is just what i have been working toward. Fixing my credit and bettering my self for my family’s sake. This is not something I would have done before, The 8K made it possible for me to be able to do this. I need this… I really hope it gets passed.
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Andria
June 29, 2010 @ 1:28 pm
PLEASE PLEASE PLEASE house of reps vote yes on this! My closing date was set as June 30th and then the home builder messed up and we wont be able to close until July 21st! We have been under contract since February! It’s just not fair if they dont pass it, we need this money since our downpayment will drain our savings account!
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