The state of Illinois along with our fair city of Chicago were among the highest in fraudulent loans processed during the the big real estate boom that was artificially inflated by greed from the mortgage industry and everyone in real estate that turned a blind eye. Mortgage principals that had never failed the housing and banking industry were tossed aside in order to line the pockets of unscrupulous professionals from bond rating institutions, mortgage insuring contracts, appraisers, mortgage brokers, real estate agents, and some buyers that were doing nothing more than buying as many properties as they could and cashing ot at the end of every purchase knowing good and well they could not afford those loans.
That being said the rules that had applied to loans and were in place to protect the public and lending institutions before the collapse are now back in place so in no way shape or form can a federally backed mortgage be greater the value of the house in order to pay off other debt. In a nut shell that was a bad and corrupt way of home buying that should have never occurred.
As a further consequence of those bad lending practices during the boom we may find those who can only afford to purchase housing in the 50K to 100K range unable to obtain financing. This was the mortgage loan amounts that had the highest predatory loans during the boom. As the rules have know become stiffer and cost to originate loans has increased, and the new fines that will be enacted for any errors on the HUD, lending institutions are trying eliminate what they consider non-profitable loans. As an advocate for housing available for all that work hard and qualify I hope lenders are prevented from eliminating loans 50k to 100K. When the spoke about this in 2013 Economic Outlook held by the Chicago Association of Realtors I was highly disturb by this topic. I myself come from a family that started in a home that in this type of policy goes forward my mother would not have been able to buy her first home. Hard working people should not be punished for the errors of the greedy few. As you can see this is something I am very passionate about.