Congress Extends Tax Credit Closing Deadline Until September 30, 2010

Congress Extends Tax Credit Closing Deadline Until September 30, 2010

Congress has passed a bill to give homebuyers another three months to close on their home loans and receive tax credits up to $8,000. The bill applies ONLY to homebuyers who met the April 30, 2010, deadline with a signed contract to purchase a new or existing primary residence. The bill would extend the deadline to September 30, 2010, for homebuyers to close on their real estate transaction. The previous deadline was June 30, 2010. President Obama is expected to sign the measure into law. He better or he is going to have an estimated 180,000 homebuyers (as estimated by the National Association of Realtors) who will be very angry at him since that is the number of buyers estimated to be affected by this law.

This is great news for buyers who have had offers in on Short Sales before the April cut-off date and for loan agents who promised their clients they would meet the June 30, 2010 cut-off date and were not able to deliver.

As we all know, or you should be learning, most banks are taking their sweet time processing short sales, so this will give most buyers time to close their transactions. If you are a buyer in a transaction with Chase as the primary lender on your short sale, I will warn you now, do not get your hopes up, especially if the homeowner is current on their mortgage payment. Chase has a nasty habit of moving those short sale files into the loan modification department repeatedly because the system canot figure out that people who care about their credit do whatever they can to keep their mortgage paid. If a file is not easily determined to be in imminent default or in default, the bank’s system moves these files to the loan mod department…where the people cannot read the big bold letters SHORT SALE that agents often write all over their offers so this very problem does not happen. I have had this happen three times with the same file this year. It is also funny that even though the system can move an account number from one department to another, it cannot transfer all of the associated documents…AKA, the SHORT SALE PACKAGE from one department to the other. All of this moving from department to department pretty much starts the process over with each change. Sellers have to provide updated pay stubs, bank statements, etc. continuously. Agents of these short sales need to call at least twice a week to make sure their file is in the right department and that they still have everything they need AND that the file is still moving forward. It is truly amazing how they supposedly lose various documents continuously.

If you have a Chase SS going and the seller has stopped makig their payments, there may belight at the end of the tunnel for you. However, I heard today from my short sale network, that Chase is not releasing deficiencies on a lot of their short sale in the new version of their approval letters. If sellers will only agree to a non-deficient short sale, that may kill a deal.

I am expecting some Chase approval letters to come over in the next couple of months. I will let you know what my experience is. If you have had received a Chase Approval letter recently, I would love to hear what your experience has been. Would even love to see a copy of the letter…with anmes and account numbers black-out of course.

I think the right bill should have said that anyone in contract as of April 30, 2010 and closes that transaction will qualify for the credit. Why do they have to have a cut-off date? What are your thoughts?

I have a short sale in Livermore, CA right now where a loan agent told the buyer they would close on the 28th and docs did not arrive until 6/30/2010….two days after the buyer was supposed to close escrow. The buyer now has decided to wait a couple weeks before he closes escrow and have the docs redrawn.

I personally think the loan agent of the bank/company the loan agent works for should have some liability for broken promises. You simply should not be able to make promises like that and get away with no keeping your end of the bargain in my opinion.

Do you think Obama should sign the bill into law? Why or why not?

Do you think there should be some sort of punishment for loan agents who made promises that they did not keep and may now be bailed out by the new law if President Obama signs it?

Have you or someone you know been negatively impacted by this deadline or loan agents who could not make the deadline? I would love to hear your thoughts and about your experiences!