Supervisors have also observed that lenders are increasingly combining nontraditional mortgage loans with "risk layering" practices - such as by not evaluating the borrower's ability to meet increasing monthly payments when amortization begins or when interest rates on adjustable rate mortgages rise due to indexing or at the end of a "teaser" rate period.
We also used our liquidity tools to make funding available to banks that might need it. In addition to our discount window, we established a new facility under our emergency lending authorities, the Bank Term Funding Program.