I THINK WE CAN ALL AGREE that the mortgage industry needed more oversight following the loosey-goosey days of the early 2000s. But how much regulation is enough, and have we gone too far?

CFPB, HUD/FHA, FHFA/GSAs, HUD/FHEO, Federal Reserve, OCC, FDIC, SEC and finally the DOJ — an alphabet soup of federal agencies with oversight responsibilities for the mortgage industry. This long list of regulators does not include state agencies that also keep tabs.

Interpreting the various rules and regulations can be a nightmare. I have heard from more than one compliance attorney that most of the rules are subject to interpretation; it is difficult if not impossible to get a regulator to give clear answers. This leads to a lot of confusion, with different lenders implementing different policies depending on their interpretation.

The whole mess adds up to extraordinarily high expenses for lenders, who now have teams of lawyers dedicated to interpreting policies, and the unfortunate truth is that consumers pay for it all with higher rates and fees.

High costs are not the only consequence for consumers. The common notion is that qualifying for a home loan today is much more difficult, but the reality is that qualifying for a standard “A” paper loan is much the same as it always has been, with one big difference: the documentation requirements. We used to document income with a borrower’s pay statements and W-2s. Tax returns were a requirement only for folks who had unusual income like rental properties or small businesses. But tax returns are now standard practice for almost all loans, and because of the volume of information contained in some tax returns, further documentation becomes necessary.

Money laundering statutes now force lenders to take a microscope to bank statements. In many cases, borrowers have to document and explain any miscellaneous deposits of more than $1,000. For many this can prove a daunting and cumbersome task.

Normally I meet with my clients when they sign their final loan papers to make sure they understand the documents and address any questions or concerns. I printed off a document set last week for a buyer to review the papers prior to signing. Now, I have a pretty sophisticated, ultra-high capacity and high-speed machine, but in the process of printing the documents my machine overheated and I had to give it a rest before I could finish.

The redundancy is over the top: For every new regulation there is a new form or disclosure. In some cases different regulators have different requirements, so there are two or even three different documents covering the same issue. Not many borrowers have an interest in reading the monumental stack of papers that has become a standard closing package. In the best case, borrowers have the assistance of a knowledgeable lender to guide them through the process. But this doesn’t always happen.

Regulating the mortgage industry to prevent another catastrophe is necessary and should be a good thing for the industry, as well as consumers. The current level of bureaucracy has solved some issues and created others. Can we just find a happy medium?

Guy Benjamin (CAL BRE License #01014834) writes a weekly column for The Herald, offering general information on real estate matters. As it is impossible to address all possibilities and variations, he will try to answer individual questions by readers who contact him at 707-246-0949 or gbenjamin@rpm-mtg.com.

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