Many first-time homebuyers took advantage of the tax credits available earlier this year to sign contracts on properties. Once the April 30 deadline for those transactions passed, the purchasers had until June 30 to close. However, with the glut of lending issues impeding swift mortgage processing, that closing deadline may be pushed back.
Tax-Credit Closing Deadline to Move?
Last week, the U.S. Senate approved an amendment that would move the closing deadline from June 30 to Sept. 30, allowing more time for lenders to approve mortgages.
This week, the Senate is expected to vote on the full legislation, after which the House of Representatives would have to approve the measure for it to take effect.
Senate majority leader Harry Reid (D-NV) proposed the measure, noting that "[t]here is growing concern that because of the time it takes for banks to complete transactions such as short sales, many of these home purchases would not be complete before the deadline through no fault of the homebuyer."