The cost of compliance is a small percentage of mortgage lending expenses. We estimate that the use of automated systems lowers predatory lending law compliance costs to about one dollar per loan. Strong compliance also may reduce lenders' expenses by lowering the incidence of time-consuming and expensive foreclosures. Most important, the cost of complying with state laws is dwarfed by the millions of dollars in homeowner equity that is saved each year by these laws.
July 26, 2005