But such incentives also would raise the cost of the program for the borrower and possibly for the government as well. As a final example, providing investors with some of the benefits of any shared-appreciation agreements might encourage them to allow servicers to write down principal and refinance borrowers into a government-backed program.
However, providing the government with such agreements could be one means of compensating taxpayers for shouldering the risks associated with the program. Even if the right balance for the program can be struck, obstacles remain to the successful implementation of a government program designed to forestall preventable foreclosures.