Not entirely cherishing their memories of Jack Kemp as secretary of Housing and Urban Development, mortgage industry leaders are unsure about what a Kemp vice presidency might mean for them.

Even as news of his impending nomination as Sen. Bob Dole's running mate galvanized the Republican Party's convention in San Diego, mortgage lenders recalled him as a controversial and often unpopular advocate of flat taxes without mortgage deductions, low interest rates regardless of inflationary costs, and restrictions on Federal Housing Administration loan insurance.

While some Republican-leaning observers praised the choice of Mr. Kemp for strengthening Mr. Dole's prospects, others expressed uncertainty about the consequences should their underdog ticket prevail in November.

"This is a mixed bag," said Paul S. Reid, President of American Home Funding Inc. of Richmond, and president of the Mortgage Bankers Association of America.

"Clearly it helps to have someone in such a high position who understands the importance of housing to the vibrancy of the economy," Mr. Reid said. "But there are concerns about how he would view the Federal Housing Administration."

He said the flat tax that Mr. Kemp advocated without allowing deductions for mortgage interest would be disastrous.

Angelo Mozilo, vice chairman of Countrywide Credit Industries, spoke for much of the industry when he called Mr. Kemp "a lousy secretary" in 1992. That was the year he stepped down after four years in the Bush administration.

Mr. Kemp's record has not improved since, said Ron J. McCord, president of American Mortgage & Investment Co. in Oklahoma City. He said Mr. Kemp last year endorsed privatizing HUD and the FHA, which would be anathema to the mortgage industry.

Mr. Kemp was a champion of "enterprise zones," privatization of public housing, and other free-market solutions to inner-city problems. He served as HUD secretary after 18 years as a Buffalo congressman and a decade before that in professional football.

His attention to urban problems made him an unusually popular Republican in low-income areas, but his agency was roundly criticized for long delays in approving loan guarantees for affordable housing initiatives. He also infuriated the mortgage industry by tightening down-payment requirements and restricting the size of loans eligible for FHA insurance.

Fair-lending advocate John Taylor, president of the National Community Reinvestment Coalition, said Mr. Kemp has an inflated reputation for inner- city programs: "There wasn't any fair-lending enforcement under Mr. Kemp."

Among those on the pro-Kemp side was Alfred A. DelliBovi, president of the Federal Home Loan Bank of New York, who was Mr. Kemp's top deputy at HUD. "This is absolutely a positive," he said. "He is not afraid to give people the opportunity that credit avails them, and he is for low interest rates. Having someone at the top level of government that believes in those two things is critical."

James Montgomery, chairman of Great Western Financial Corp. in Chatsworth, Calif., and of America's Community Bankers, said the banking industry should embrace Mr. Kemp because he improves Sen. Dole's chances.

"Bob Dole will be better for the business community than Bill Clinton," said Mr. Montgomery. He added that a President Dole would not allow Mr. Kemp to proceed with anti-banking initiatives.

Bankers would find Mr. Kemp easy to work with, said Paul Willax, who was president of Empire of America, a defunct Buffalo thrift, and now teaches at the State University of New York at Buffalo. "He won't come up with a lot of surprises or schemes," said Mr. Willax, who has known Mr. Kemp more than 25 years. "You'll always know where he is and what he is thinking."

Sen. Connie Mack of Florida, a banking committee member who was among the finalists for the Dole ticket, said Mr. Kemp brings "an entrepreneurial vision" that can pose a strong challenge to the Democrats.

Bill McConnell contributed to this report from San Diego.

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