Five Questions About the Mortgage Crisis

The housing crisis and mortgage mess may be moving off the front pages, but I still have some big questions.

Many of those questions revolve around how so many smart people -- not the homebuyers, but Wall Streeters -- could have been so dumb. Or how they could've been so 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 just a few questions I'd love to get answered:

Why Is Alan Greenspan Surprised?

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 -- the same Federal Reserve chairman who acted as cheerleader for the refinancing boom that fueled both the economy and his legacy of "growth."

In a February 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."

In the same speech he pointed out: "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!

Where Are the Mortgage Brokers?

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?