Sunday, January 29, 2023

Deadlines loom as Congress delays action

by Kim Cooper
| June 27, 2010 8:27 AM

As the June 30 deadline to benefit from the tax credit rapidly approaches, the House of Representatives takes an extended weekend. Voting to extend the deadline cannot take place now before next week and if the extension is approved, it will come in the 11th hour. This leaves many buyers, sellers and their agents in stressful times.

You will recall the $8,000 first-time homebuyer credit and $6,500 repeat buyer programs required that the home purchase close by the end of this month. Although approved by the Senate two weeks ago, the House has not yet voted to extend the closing date, leaving many in tenuous situations.

When the tax credits were approved the 60-day window for closing a transaction seemed more than adequate. The problem with this window soon became apparent as banks were flooded with offers on their foreclosed and short sale properties, overloading their resources.

Although buying a foreclosure is pretty straightforward a short sale can take months to be approved. A short sale is an unusual circumstance because the bank has a secured note on the house and a borrower who is obligated to pay for it. Market conditions in many cases are below the amount owing on the home. This may require the debtor to agree to a selling price that is below what they paid for the home and many are willing to do so.

The difficulty comes from getting the offer accepted through the various layers of bureaucracy at some banks. It is not out of the ordinary for a buyer and seller to wait as long as six months for the bank to respond to an offer. Again, the banks' motivation is lacking since they already have a debtor in place.

This logjam of offers and the volume of foreclosures, coupled with last year's changes to the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) have created an environment where even those with excellent credit may face delays getting financing approval. Ultimately, this will mean pending home sales could fail because they cannot close before the tax credit deadline.

The National Association of Realtors continues to lobby hard to get this extension and will stay on it until the end. Our work does not end there however. Another obstacle facing home closings is the expiration of government flood insurance. We continue to lobby for refunding of this program but since there will be no votes until next week we will all be waiting to see what happens with H.R. 5569 and lobbying for its passage. It will help if you will contact your representatives in Congress to get these measures approved.

On a positive note mortgage rates were down again last week. A check of the IHFA Web site showed a 30-year rate of 4.26 percent. And of course, there are plenty of affordable homes for sale.

For a safe trip home, call a Realtor. Call your Realtor or visit to search properties on the Multiple Listing Service and to find a Realtor member who will represent your best interests.

Kim Cooper is a real estate broker and the spokesman for the Coeur d'Alene Association of Realtors. Kim and the association invite your feedback and input for this column. You may contact them by writing to the Coeur d'Alene Association of Realtors, 409 W. Neider, Coeur d'Alene, ID 83815 or by calling (208) 667-0664 with your questions or commentary.

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