In all, there are several features of the mortgage market that make overcharging possible. The evidence suggests the following with respect to why consumers are poor shoppers for mortgages and why they are overcharged in today’s mortgage market:

Consumers are in general not familiar with the complicated real estate and mortgage settlement process. Many consumers deal only infrequently with the mortgage process. Many borrowers do not take the time to educate themselves on this inherently complex process.

While most consumers shop extensively, there is evidence that a substantial minority contact only one lender. There is also evidence that those who do little shopping end up paying more.

The complex, multi-faceted nature of real estate settlement transactions further complicates the operation of market forces. The real estate transaction itself (i.e., the home purchase) represents a huge sum of money and will appear more significant to the consumer than any one of the many settlement services. In other words, consumers might focus on the home purchase, rather than closely monitoring the “second-order” mortgage costs.