Senate OKs new tax credit closing deadline
Backers of amendment cite backlog of 180K homebuyers
By Inman News, Wednesday, June 16, 2010.CLARIFICATION: While the Senate has amended HR 4213, the "American Jobs and Closing Tax Loopholes Act of 2010," to extend the closing deadline for the tax credit, it has not held a vote on the amended bill itself. Senate Democrats have reportedly trimmed $60 billion in spending from the bill in hopes of passing it this week. The House and Senate must resolve differences between previous versions of the bill passed in both chambers before it can become law.
The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.
Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.
The amendment to HR 4213, the "American Jobs and Closing Tax Loopholes Act of 2010" -- which primarily extends unemployment insurance benefits -- was approved in a 60-37 vote Wednesday. The vote on the amendment was mostly along party lines, with only four Republicans in favor and one Democrat opposed. The Senate has not yet voted on the amended bill itself.
"While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law," Reid said in a statement.
The House passed an earlier version of the bill in December, which the Senate amended and approved in March. The House and Senate must resolve differences between versions of the bill before it becomes law.
The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.
The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.
"Since these applications were already in the pipeline and figured into the program's cost, the extension of the closing deadline should not incur any further government costs," NAR President Vicki Cox Golder said in a statement.
There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.
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Submitted by Bruce Hahn on June 16, 2010 - 6:09pm.
American Homeowners Grassroots Alliance
We hope this amendment becomes law. A lot of buyers got caught up in paperwork glitches due to the current unsettled market. For many the availability of the credit was a significant factor in their decision to buy, and some of those contracts will fall through if the credit extension does not pass. In the interest of fairness, and to help the recovery of housing values, we hope that this amendment is included in the final bill.
Bruce Hahn
President
American Homeowners Grassroots Alliance
Submitted by Jacob Clayton on June 17, 2010 - 6:28am.
Thanks Inman! I hadn't heard any sort of legitimate confirmation of this yet and I know a couple of our very anxious first time buyers are going to be breathing a huge sigh of relief. Things were really getting down to the wire with overwhelmed banks trying to close by the end of the month, this was a good move by the Senate.
Submitted by Katherine King on June 17, 2010 - 7:30am.
We live in a FEMA flood plain and cannot close any deals because they have not been funded by congress yet. This extension will allow all of our first time buyers to realize the tax credit.
Submitted by Bobbie West on June 17, 2010 - 9:12am.
So they've extended for 3 months for people ALREADY in contract..lovely.Had they done this a little earlier..there would have been MORE people under contract.
Submitted by Matt Carter on June 17, 2010 - 9:33am.
Don't forget the Senate must still pass the amended bill itself, which deals with a range of issues from extending unemployment benefits to Medicare funding. According to Politico, Democrats have trimmed $60 billion in spending from the bill in the hopes of passing it this week.
http://www.politico.com/news/stories/0610/38650.html
The Congressional Budget Office on May 27 estimated that a previous version of the bill would increase budget deficits by $115 billion this year and next.
http://www.cbo.gov/ftpdocs/115xx/doc11531/LevinLtr_HR4213_Rules_Reported.pdf
Sen. Reid's claim that his amendment to extend the tax credit closing deadline would reduce the deficit is apparently tied to language in the amendment that would close a tax loophole allowing companies that have had to pay punitive damages in antitrust lawsuits from claiming those payments as a tax deduction.
To see the text of the Reid amendment, click on the link below, and then click on "Page: S4888"
http://thomas.loc.gov/cgi-bin/query/R?r111:FLD001:S54888
Submitted by Zenaide Swenson on June 18, 2010 - 5:51am.
The extension for achieving closings that were legitimately in the pipe line is a wonderful thing. I have clients that we have been waiting to close for over 3 months because the bank owned property that they are trying to purchase has missing necessary paperwork to pass clear title. With this extension, all will not be wasted; time, energy and finances... the ultimate goal will still be achieved- home ownership!
Submitted by Matt Carter on June 24, 2010 - 2:49pm.
Senate vote to limit debate on HR 4213 (the bill to extend closing deadline for homebuyer tax credit (among other things), just failed by three votes ... 60 yes votes needed to move forward to a vote on scaled down bill... only 57 there.
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00200
Submitted by Matt Carter on June 29, 2010 - 4:53pm.
The House has passed a standalone bill extending the tax credit closing deadline
http://www.inman.com/news/2010/06/29/house-oks-extension-tax-credit-closing-deadline
Senate could follow suit Wednesday (June 30).
Submitted by Matt Carter on July 1, 2010 - 9:35am.
Bills extending the closing deadline for claiming the homebuyer tax credit to Sept. 30 and reinstating the National Flood Insurance Program (for 3 months) have cleared the Senate and are headed for President Obama's desk for signature:
http://www.inman.com/news/2010/07/1/tax-credit-closing-deadline-extension-passes-congress
Submitted by Matt Carter on July 6, 2010 - 11:08am.
Both bills were signed into law Friday, July 2:
http://www.inman.com/news/2010/07/2/obama-signs-tax-credit-flood-insurance-extensions-law