Applications Increase as Tax Break Deadline Looms

In recent weeks mortgage lenders have experienced a flurry of new applications from prospective homebuyers who see the April 30 federal tax credit expiration fast approaching and want their $8,000 "gift" from Uncle Sam. "We're getting calls from people who are frantic and want to get their contracts in," said John Walsh, the chief executive of Total Mortgage Services, a Milford, Conn., nonbank that funds loans in 21 states. Like many mortgage companies, Walsh has had decent volumes this year, but he said he fears that once the $8,000 tax credit for first-time homebuyers and a related one for move-up purchasers sunset at month's end, loan officers might be hard pressed for business. "I could be wrong," Walsh said, "but a lot of customers know the timing of this thing and they realize the end is near." He said he fears the second half of 2010 could be deadly quiet for new originations. Brian Benjamin, a loan broker based in the northern New Jersey suburbs, said he too has seen a pickup in applications. "To be eligible" for the tax credit, "they need to get the contract signed by April 30," he said. (For the full story see the weekly edition of National Mortgage News.)