In some cases, it enables the insurer to entertain marginal risks with a good insurance score.
The underwriter still might decide to accept a marginal risk but specify that it be priced according to published rates;
So a stronger loan--say $100,000 to expand an up-and-running business--would make it easier to take
marginal risks. To cover the risk, the bank, the borrower, and the government pay a small percentage between 1.5 to 3.5 percent of the loan amount into a reserve fund.
"If all you needed to do is point to some
marginal risk," he wrote, "then this Court should have struck down the 24-hour waiting period in the Casey decision, because the plaintiffs there said the 24-hour waiting condition has imposed significant risks.