The majority of House Republicans voted against the extension, citing concerns over its impact on the federal budget deficit. Then went on to vote in approval of the homebuyers tax credit contract extension.

The extension gives extra time to thousands of homebuyers trying to get a popular federal tax credit by the end of the month. While this may be good news to some, the attached companion proposal to extend insurance benefits to unemployed workers was rejected by the Senate, a huge blow for those already on the real estate ladder and struggling with unemployment or those with financial investments in real estate.

Real estate agents say thousands of settlements may not be completed by Wednesday because settlement offices are slammed with buyers trying to close on transactions by the end of this month in order to receive the funds.

“Up to 180,000 homebuyers will now receive the tax credit they deserve, and our housing market will be strengthened as a result,” House Speaker Nancy Pelosi said in a prepared statement after the lower chamber approved the measure.

Business banking Critics claim that the three-month extension is an invitation for mortgage fraud, providing prospective home buyers time to back date contracts to a date before April 30 and subsequently closing on those contracts by the new September 30 deadline.

Congress extended the $8,000 tax credit for first time homebuyers last fall and added a $6,500 tax credit for all buyers who were purchasing a primary residence.

For a complete picture, for national mortgage applications there was a short term decline in seasonally adjusted rates, dropping to 5.9 percent from the previous weeks. This was data lifted from a report by the Mortgage / Business Banking Association. While the unadjusted rate of decline was similar at 6 percent.

In a similar vein there was a number of refinancing and financial investments agencies that reported a decrease even more sharply then first time applications, a 7.3 percent drop from the previous week. However, the seasonally adjusted decrease was just 1.2 percent.

Home purchases declined most sharply of all, though, the report said. The seasonally adjusted decline was 36.8 percent from the previous week, though the unadjusted decline was just 2.3 percent.

The government is considering an extension on the tax credit scheme throughout September. It is currently set to expire on June 30. Which will come as good news for those who are financially stretching their pockets and savings accounts.

The assessments will be taken by a “institution by institution,” basis. The French President Nicolas Sarkozy told reporters at an EU summit in Brussels yesterday. German Chancellor Angela Merkel said it was important to give “maximum transparency.” Asked how the governments would react if the tests revealed shortcomings, she said the EU has “taken precautions,” including a 750 billion- euro ($928 billion) financial backstop.

“The results could be very helpful reassuring investors that the European financial system is sound,” said Andrew Milligan, the Edinburgh-based head of global strategy at Standard Life Investments Ltd., which oversees about $221 billion. “The devil will be in the detail.”

“The problem with the stress testing, in most people’s opinion, is fairly serious: It’s not stringent enough,” said Ralph Silva, an analyst at London-based Silva Research Network, which specializes in financial-services firms.

“Europe needs this because the markets are asking for it,” Gonzalez said at a seminar in Santander, Spain.

Bankers and their lobby groups across Europe had opposed publication. Deutsche Bank’s Ackermann said last week that releasing the stress tests would be “very, very dangerous” if government mechanisms to support European banks weren’t in place beforehand. A spokesman for the bank declined to comment.

“Now that we have seen mortgage approvals data for the first four months of this year, it is becoming clearer that the risks associated with our lending forecast for 2010 are on the downside,” said CML Director General Michael Coogan.

“We are predicting gross lending of 150 billion pounds this year – and net lending of 15 billion pounds – but are keeping our financial investments forecast under review as we are tracking below these levels to date.”

The CML statement came after business banking figures showed net mortgage lending rose by just 490 million pounds in April below forecasts for 700 million pounds but above the 168 million pounds reported in March.

The CML — whose members savings account for around 94 percent of all UK residential mortgage lending — noted that the slowdown in housing market activity this year may have been partly due to the expiry of a tax break on lower-valued houses at the end of 2009. “The data is likely to reflect both the continuing shortage of mortgage funding and weak consumer confidence, and therefore demand,” Coogan said, adding the CML would update its forecasts later in the summer.

The mixed news is that mortgage loan applications, if they were to be measured by the MBA’s purchase index, which including all single-family home mortgages, fell by 27 percent week to week, and 24 percent lower than a year ago.

However this is not quite as terrible as it sounds as the drop is due to the end of the Obama administration’s homebuyer tax credits scheme to boost the real estate markets, boost consumer confidence, and lessen the strain on savings accounts. If you were thinking of buying a house this spring, you would have probably rushed to do so before the tax credit expired; in terms of aggregate sales, it means that March and April have stolen from May and June.

“The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009,” Michael Fratantoni, an MBA economist, said in a statement. “However, financial investments did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks.”

The second report shows that one in ten mortgage holders is now delinquent, meaning late on at least one payment. The first-quarter rate of 10.06 percent is up around 1 percent from a year ago. That is an all-time high. The percentage of loans in foreclosure was 4.63 percent in the first three months of the year, another record high. All in all, around 15 percent of homeowners are either in foreclosure or late on their payments. Before the financial crisis, most financial firms’ asset-backed security models did not factor in levels of delinquency higher than 5 percent. Now, with the foreclosure crisis peaking, we’re talking about numbers three times that predicted upper limit.

One other sour note in the MBA report: States that had relatively stable housing markets are seeing an upturn in delinquencies and foreclosures, implying that the “sand states” of California, Florida, Nevada and Arizona aren’t the only ones banks should worry about.

“The economy has begun to generate jobs and layoffs have declined, although new claims for unemployment insurance remained higher in the first quarter than we expected. The percent of loans behind one payment had been declining as first-time claims for unemployment began falling in March 2009. Those new claims stopped falling during the first quarter of this year, which likely halted the decline in the underlying 30-day delinquency rate. If mortgage delinquencies are not yet clearly improving, it also appears they are not getting worse. However, a bad situation that is not getting worse is still bad.

“For several years, the four states of Florida, Arizona, Nevada, and California have dominated the national delinquency and foreclosure numbers. Florida is still getting worse, but California is showing signs of improvement. However, Washington, Maryland, Oregon, and Georgia showed the greatest overall increases in foreclosures started compared to last quarter,” Brinkmann said.