Today the US House of Representatives passed legislation that would extend the closing deadline for the Home-buyersTax Credit. The Senate has already passed a similar measure and this is the second time this year for the house to do so. If the US Senate can pass a conference bill the credit will be available to Closing Home buyersall the way through September, 2010. (The deadlinie to qualify for the credit of April 30th, 2010 will not be extended, this bill is for closing those transactions only)
Estimates are as high as 180,000 for loan applications backlogged in a system that became swamped by potential home-buyers trying to cash in on the tax credit that can be as high as $8,000 to a first time home purchaser. The vote was for a separate bill as previous attempts to remedy the bottleneck in the nations mortgage origination, processing and underwriting systems became mired in partisan politics as the measure was made part of more controversial legislation in the Finance Reform bill currently being debated on Capital Hill.
Although the measure is expected to pass there is some concern as to when. Most projections from Capital Hill are saying that even if it dosen't get done and made law by June 30th, it can be retroactive. The death of Senator Robert Byrd (West Virginia) may cause some delay. Sources are not sure to what extend if any.
"The slow down in approving mortgages is really no one's fault. We have an industry that has had to reduce staff nationwide do to the slowdown in applications and then it gets hit with a massive month of applications and then after that another slow down. There is no way you can fill staff for a couple of months so the eemployees left have to do all the work. These are not labor positions. These people are highly technical and specialized. Right now it is ruthless in the Lending industry" said John Tuggle, Senior Lending Officer for Freedom Mortgage Corporation in Georgia and Alabama.
Veterans (active and former) have been allowed special exemptions and in some cases may qualify for the First Time Homebuyers Tax Credit well into 2011. A VA lender can assist any military personel in the details and whether or not they qualify.
If the deadline is extended it may have a huge and settling effect on residential Real Estate for the next few months and could allow lenders to hire based on expectation for a few months instead of a few weeks. Stay tuned to "...As The US Capital Turns.."