In addition, programs that provide for the voluntary participation of lenders and servicers should provide a natural brake on moral hazard, as lenders and servicers would remain free to pursue other options available to them in situations where they believe the borrower has the ability to repay his or her existing mortgage. 2.
Mitigating adverse selection  A robust defense against adverse selection – the incentive of current servicers or lenders to send only their worst credits to the government-insured mortgage program – is necessary to protect the interests of the taxpayer.