FWIW, my view on reserve funds that I've got from elsewhere. It might be useful if I'm not diversified across a lot of loans. If I am diversified and they 1) don't reserve enough, then I will lose money at some point anyway, 2) reserve too much, then I'm missing out on interest, 3) they reserve exactly the right amount, then I'm paying the money now, rather than later when the loss occurs, so I'm missing out on some money now.