(c)  Economy – Risk based pricing environment would improve transparency and soundness in the lending process. Borrowers with a good credit history will be rewarded for their discipline while delinquent borrowers will no longer be subsidized by lower-risk consumers. In the aggregate, lending is increased, leading to greater economic growth, rising productivity and greater financial inclusion.
The Federal Reserve was in a third-loss position, and thus aimed to serve the role of liquidity provider. 7  Mortgage finance deserves careful review. Quasi-governmental entities, like Fannie Mae and Freddie Mac, are increasingly being deployed as fiscal agents. The Federal Reserve’s actions should not slow the impetus to implement fundamental reform in housing finance.