Since virtually every securities class action settles after surviving a motion to dismiss, the riskof non-payment is presumably much lower for plaintiff attorneys and courts might consider lowering or eliminating the multiplier on billable hours the firms rack up after that.
Novy-Marx concludes with a thought experiment where he substitutes GASB accounting with an identical system where future liabilities are discounted at the muni rate (after all, the riskof non-payment to pensioners is no different, or in most case lower, than the risk to bondholders).
Worse, nearly 10 percent of reverse mortgage borrowers were at riskof foreclosure due to non-payment of taxes and insurance as of February, 2012, according to the CFPB report.