As another example, borrowers could be required to share with the government or with the holder of the borrower's existing mortgage either the equity created through a write-down or the future appreciation in the home price, or both, over some specified time period. In other words, the government or investor would have what is known as a "soft-second."
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.