By JAMES FINK
jfink@bizjournals.com | 716-541-1611

The mad rush to close residential real estate deals by the June 30 deadline for federal tax credits saw the Erie County Clerk's office set a new record.

The irony is that federal lawmakers, at the 11th hour, extended the closing date to Sept. 30 because of a nationwide backlog.

So now the question is this: Will there be another rush in the last week of September, which also coincides with the close of 2010's third quarter?

Industry insiders say the rush is indeed over and Sept. 30 will pass with little of the frenzy that accompanied the June 30 deadline.

"For the most part, a large percentage of the deals were closed by the June 30 deadline," said Mark Lotterer, vice president and area manager for Chicago Title Insurance. "We haven't seen anything that will indicate there will be a large push in September."

Under federal guidelines, all of the residential deals had to be under contract by April 30 and close by June 30. But demands by consumers prompted federal lawmakers to extend the deadline by 90 days because of the backlog faced by banks and title companies,

First-time home buyers were eligible to receive up to $8,000 in federal tax credits, while move-up buyers could receive up to $6,500.

Rep. Brian Higgins, D-Buffalo, said the extension was necessary due to a backup. He voted in favor of it.

"It provides fairness for Americans who purchased a home before the April 30 deadline in order to secure the tax credit by making sure they are not unfairly punished because their closing date has slipped due to circumstances beyond their control," Higgins said.

The Erie County Clerk's office, meanwhile, was praised for deftly handling the crush of closings. County Clerk Kathleen Hochul said she was able to adjust her staff to handle things, particularly in the final days leading up to the June 30 deadline.

"Everyone that was in here had their deal closed and filed by 5:30 p.m. (June 30)," Hochul said.

From Friday, June 25, through Wednesday, June 30, her office processed 760 residential real estate closings, including 220 on the final day. The office typically handles between 60 and 80 closings. Activity during that week was up 137 percent due to the federal tax credit deadline.

The clerk's office handled 190 closings on June 25, 160 on June 28 and 190 on June 29.

Congress and the Senate, however, were feeling pressure to extend the deadline because of the backlog.

"It wasn't so bad here, but elsewhere it was," Hochul said.

Chet Bridger, M&T Bank spokesman, said the leftover business from the tax credit program amounts to less than 1 percent of the bank's mortgage business. Most deals were processed in time for the June 30 deadline.

"The extension was helpful," Bridger said, "but we don't expect it to be a big crunch like it was in June."

The Erie County Clerk's office will once again make adjustments, if necessary, Hochul said.

Lotterer, of Chicago Title Insurance, said he doubts there will be a repeat of what happened in June because many of the deals have closed.

"By the time we hit June 30, most people were done (with the closings)," he said.

Anita Williams, a paralegal with the Buffalo law firm of Watson Bennett Colligan Johnson & Schechter LLP, agrees. She focuses on real estate closings.

"There's no way September will be as crazy of a month as June was," Williams said. "No way."

She said she was putting in 12-hour days to meet the closing needs of clients.

Because few knew if federal lawmakers were going to extend the deadline, many lawyers advised clients to meet the June 30 date.

As a result, the new deadline may turn out to be an afterthought.

"There's probably a few that will work their way in," Williams said. "But around here, most people already met the deadline and have moved into their new homes."

That doesn't mean summertime has been quiet, however. In fact, quite the opposite, according to Lotterer.

With interest rates dropping, home sales continue to rise.

Freddie Mac's 30-year fixed-mortgage rate was 4.54 percent July 30, compared with 5.07 percent Jan. 1 and 5.22 percent July 30, 2009, and 6.43 percent July 30, 2008.

"With mortgage rates being what they are, we are definitely seeing a shot in the arm," Lotterer said. "Still, that is normal and what we saw a few months ago."