As the housing crisis and mortgage mess move off the front pages, some nagging questions remain. Many of those questions revolve around how so many smart people — not the homebuyers, but Wall Streeters — could have been so dumb or blinded by greed to the eventual results of what they were doing. I wonder how they can complain now that they're losing money.

Here are a few of my questions:

Alan Greenspan has been publicly lamenting the fact that he's being blamed for the mortgage mess. That's the same Greenspan that flooded the credit markets with liquidity and pushed rates down. It's the same Fed chairman who acted as cheerleader for the refinancing boom that fueled the economy, and his legacy of "growth."

In a Feb. 23, 2004, speech to the credit industry, Greenspan actually endorsed adjustable rate mortgages, noting that while "American homeowners clearly like the certainty of fixed mortgage payments . . . American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."

And in the same speech: "The ability of lending institutions to manage the risks associated with mortgages that have high loan-to-value ratios seems to have improved markedly over the past decade." No wonder he's surprised!

If we can't pin the blame on Alan, or the bankers, or the bank regulators, or the investment bankers or the rating agencies, why can't we go back to the start and find the individual mortgage brokers who initially made the worthless loans?

That's not an idle question. The financial institutions seem quite able to find the initial borrowers when it comes time to collect or foreclose. Surely the banks or servicers have the documentation from the initial loan, noting the names and addresses of the mortgage brokers who talked families into these great adjustable rate deals, and collected $1,000 per deal. Surely someone has considered tracking them down on their yachts — and charging them as individuals with fraud.

(Let me make it clear that I'm only referring to those jerks who made loans to people who clearly had no income to make the monthly payments once the initial, low rates wore off.

I don't see how we could get their bosses — now departing with big severance checks — indicted as co-conspirators.)

What happened to Private Mortgage Insurance? Lenders used to require this dreaded extra payment, typically one-half of 1 percent of the loan amount, to be paid by borrowers who had less than 20 percent equity.

This insurance was there to protect the lender from default, not to protect the borrower from loss. It was required for loans sold to Fannie Mae and Freddie Mac. The website of the Federal Reserve Bank of San Francisco still posts as an explanation for PMI:

"PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership. With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment."

Since PMI was designed to protect the lenders, surely those insurance policies should mitigate the banks' losses on the loans that went bad. Except that most of those loans didn't have PMI.

In their eagerness to make and securitize loans, the banks devised ways of splitting a large mortgage into separate, smaller "piggyback" loans, and packaging them as securities instead of selling them to the housing agencies — avoiding the PMI requirement. Those same banks are complaining about losses?

Oh, and I have one last question. This one is directed at property tax assessors: You were quick to raise property taxes when home prices were soaring. Will you be equally quick to cut those property taxes in the midst of the huge price drops we've seen? Just wondering. And that's The Savage Truth.

Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast, and can be reached at www.terrysavage.com. Her new book, "The Savage Number: How Much Money Do You Make?" has just been published. To find out more about Terry Savage and read her past columns, visit the Creators Syndicate Web page at www.creators.com.

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