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Residential Department: Q&A: Paul Lueken, Illinois Association of Mortgage Professionals: April 2008


Q&A: Paul Lueken, Illinois Association of Mortgage Professionals

Paul Lueken, President, Illinois Association of Mortgage Professionals

Illinois Gov. Rod Blagojevich recently announced the nation’s largest comprehensive, statewide plan to assist homeowners risking foreclosure. It includes a homeowner-assistance pool and statewide borrower-counseling network. As other states evaluate their housing-market woes, many will be watching Illinois -- which has the nation’s ninth-highest foreclosure rate. IAMP President Paul Lueken shares his thoughts.

What has been IAMP’s response to Gov. Blagojevich’s plan? From what I’ve seen of the plan, many aspects of the plan have “pure bailout” written on them. The state will guarantee payments for consumers. I know the government wants to help people, but sometimes you have to let people fail. The United States was built on the idea that if you’re strong, you survive. A bailout doesn’t really make sense.

As part of the plan, four Illinois-based lenders pledged $200 million to fund 30-year Federal Housing Administration (FHA) fixed mortgages. Do you think this private-sector approach makes sense? I do think it’s a better approach. Those lenders are saying, “We’ll put some money out, but we won’t take every consumer.” They will take people who are having trouble, but FHA won’t provide a complete bailout. Borrowers will still have to qualify.

Illinois has been somewhat of a hotbed of mortgage-legislation activity in recent years. Recently, Sen. Dick Durbin (D-Ill.) proposed the Helping Families Save Their Homes Act, and U.S. Rep. Mark Kirk (R-Ill.) called for the resurrection of 1933’s Home Owners’ Loan Corp. How is IAMP responding to these efforts? We’re available, and we’re volunteering our time and resources to talk to politicians. The biggest issue we want to talk about is actually all the people being locked out of refinancing because of falling home prices. I think a lot of people in government are aware of our concerns, but the way Congress is set up, it’s just a slow process.

What do you anticipate for other states similarly seeing a lot of state-sponsored legislation? I actually think the states will take a back seat because the [Federal Reserve Board] is finally getting involved. Even all those high-profile bills that are sitting in Congress might become irrelevant when the Fed rule comes out and comments are up. I think the Fed rules will supersede what the states are doing.

Five Midwestern states are among the top 15 worst in terms of foreclosures. Why? Some of the Midwestern states are under that pressure more because of recessions than because of recent housing-bubble activity. These recessions have been in part because manufacturing jobs are going overseas and because the auto industry is hurting.

But we didn’t have the large run-up like in Florida, California and Nevada. So when you have a recession, it’s a little more straightforward -- your borrowers either have a job so they can get a loan, or they don’t, so they can’t.


Melinda Young was an associate editor at Scotsman Guide. For questions on this article, call (800) 297-6061 or e-mail

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