Bill Extending Tax Credit Closing Deadline Falls Through in Senate

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An amendment that would have extended the closing deadline for the homebuyer tax credit by three months failed on the Senate floor this week

Senate Majority Leader Harry Reid (D-Nevada) proposed the extension, and the amendment itself was approved by a large margin last week as an add-on to H.R. 4213, the American Jobs and Tax Loopholes Act.

Republican senators, though, defeated the full measure on Thursday, for the third time, when Democrats moved to end debate and push it to a chamber vote. Reid has indicated that after three unsuccessful attempts, he plans to drop the matter altogether.

The amendment would have extended the tax credit deadline for closing on a home purchase to September 30. The current deadline is June 30.

The National Association of Realtors (NAR) says some 180,000 homebuyers who signed contracts in time will not be able to make the June 30 closing deadline, simply because of the time it takes for lenders to complete transactions. The trade group estimates that 75,000 of those who will miss out on the tax break are buyers of distressed properties.

NAR says its members have reported that as many as one-third of qualified applicants have already been notified by lenders that their mortgages will not close before June 30, due to the sheer volume of applications in the pipeline.

The tax credit amendment was just one piece of the multi-faceted bill that was primarily intended to extend unemployment benefits for Americans out of work for more than six months.

Republicans rallied against the measure on the grounds that it would have added $30 billion to the โ€œalready staggering national deficit,โ€ they said.