Piedmont CA Real Estate Agent Broker Anian Tunney Explains in Lay Terms Possible Pros, Cons of Proposed Reduction of FHA Insurance Premiums for 2015

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Anian Tunney Piedmont CA real estate agent broker clarifies points made in January 2015 HousingWire article.

Within the first days of 2015, President Obama announced plans to lower insurance premiums for FHA mortgages. Shortly after his announcement, HousingWire.com published their article, Everything you need to know about President Obama lowering FHA premiums.(1)

“The article does an excellent job of presenting both positive and negative opinions from a wide variety of finance, housing, and realty experts,” said Anian Tunney, a real estate agent broker in Piedmont, CA. “However, it would be nice if they presented those opinions more clearly for people outside of the real estate industry,” she continued.

The purpose of the Federal Housing Administration (FHA) is to create mortgage opportunities for people who do not meet traditional mortgage requirements, such as the how much of a down payment is necessary. FHA insures loans that have less stringent qualifications, and borrowers pay the insurance premium as part of their monthly mortgage payment.

“For practical purposes, the premium is a percentage of the principle remaining on the loan,” explained Tunney. President Obama’s plan is to reduce that percentage, saving home buyers hundreds, even thousands, of dollars a year. “In the Bay Area, the monthly savings for first-time home buyers could be significant.”

“Response to the President’s announcement goes from one extreme to the other,” Tunney commented. In Congress, Republicans were quick to cry foul citing that the FHA has already received a bailout and is currently unlawfully low of capital reserves. They theorize that reduced premiums will put the FHA further behind and could cause another housing bust. Analysts at Sterne Agee – an independent, employee owned, full-service wealth management firm and investment bank – represent the neutral reaction.

“They think the only way premiums will drop is by Executive Order and they do not believe that a reduction will create an increase in first-time home buyers – the largest group supported by the FHA – as claimed by plan supporters,” Tunney summarized.

Positive reactions to the plan came from a diverse group including: Housing & Urban Development Secretary Julián Castro; David Stevens, president and CEO of the Mortgage Bankers Association; Mike Orr, director of the Center for Real Estate Theory and Practice at the W. P. Carey School of Business at Arizona State University; and the Executive Director of the Community Home Lenders Association, Scott Olson.

President and CEO of the National Community Reinvestment Coalition, John Taylor offered a mixed review of President Obama’s plan. In brief, Mr. Taylor is happy about the first step reducing premiums represents and is disappointed that the plan does not go farther by eliminating the need for mortgage insurance on FHA-eligible loans once the borrower has 20% equity.

“Because I do not generally work with buyers with FHA loans, I do not want to make any sweeping statements about if the plan is good or bad,” Tunney admitted. The 2015 FHA loan limit for Alameda County – Tunney’s base of operation – is $625,000. However, houses for sale in Piedmont – including 6 King Avenue, offered at $4,200,000 – rarely go for under $1,000,000.

“I am interested to see if the change actually takes place and what impacts it has on the market. I want the results to be positive because anyone entering the real estate market creates a chain reaction that generally reaches into more costly regions, such as the San Francisco Bay Area, and the higher end areas within them – including Piedmont,” Tunney concluded.

About Anian Tunney, Broker Associate

Anian Tunney is an agent broker with The Grubb Company. According to statistics collected by East Bay Regional Data, Inc., she was the 2013 number one real estate agent in Piedmont, CA for the number of units sold and sales volume. Additionally, Tunney is always in the top two in yearly real estate sales for The Grubb Company’s Piedmont, office. She is known for her knowledge, experience, and network in the Piedmont community; qualities which are invaluable for finding that special home or buyers for her clients.

A fifth generation Piedmont resident, Tunney has been with the Grubb Company for over 32 years. She raised her family of four in Piedmont and is active in community projects such as the Piedmont Beautification Foundation, the East Bay Museum Auxiliary, and the Piedmont school district. Her grandmother, Amy Sutton, was a real estate agent, and now Anian works with her daughter Adrienne Krumins, making Piedmont Realty truly a family vocation. Tunney negotiates with grace and clarity of purpose. She can be contacted at 510-339-0400 ext 217, and at tunney(at)grubbco(dot)com. Her website is aniantunney.com.

Contact Information

Anian Tunney
The Grubb Company Real Estate Brokers
Oakland, CA 94611
510-339-0400 ext 217
tunney(at)grubbco(dot)com
aniantunney.com
aniantunney.com/blog

(1) http://www.housingwire.com/articles/32544-everything-you-need-to-know-about-president-obama-lowering-fha-premiums

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