Now that our future is planned-out for us, we have a couple of questions

We’ve fielded a few pre-selected questions from pre-selected members of the BwD peanut gallery for which we do not believe we have good answers so we’re throwing them out there in a semi-rhetorical fashion because we don’t believe there is a nice, neat and concise answer for them. Of course, we welcome your feedback just the same.

First question: What the heck happened to that PMI we were paying? You remember PMI, the Private Mortgage Insurance which you paid each month along with your Principal and Interest if the down payment on your house wasn’t at least 20% of the loan. Ostensibly, this payment was to protect the lender in case you defaulted early on in the loan. So…. what the heck happened? Why weren’t lenders protected? Or, why weren’t lender protecting themselves with money we were paying into a collective insurance pool? It galled us to have to scratch out another $60 every month which we knew wasn't going to pay down the principal nor could it be a write-off.

Perhaps this might help answer the question:

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. This means that you can buy a home sooner without waiting years to accumulate a large down payment.

And who wants to wait all those years just to accumulate enough money to make a lousy down payment?

OK. Next question but first the set-up: We’ve been told that the reason credit is froze up and lending institutions don’t want to lend to each other is because these same lending institutions are holding toxic assets, i.e. bad loans. But it’s tough to quantify or even locate these little critters because they’ve been “bundled” with the good loans. Good loans and bad loans totally co-habitating - living in sin, if you will.

Well, the housing market is showing encouraging trends of making a turn-around and while prices are still falling, the quantity of home sales are going up. It is the foreclosed homes, these very toxic assets that are getting snatched-up by bargain hunters, first.

So, we’re being encouraged to be patient, right? If we are patient and don’t jerk with the positive trend of these toxic assets coming off the books, doesn’t this problem start taking care of itself? Does not the crisis become less so to a point where we don’t feel obligated to pursue anymore idiotic, debt-inducing, recession-lengthening, power-grabbing, political-paybacking bailouts?

Actually, that question is subject to a nice, neat and concise answer.