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The Environmental Costs of a Mortgage

house-on-earthMortgages are putting a big dent in the environment, according to recent calculations. In fact, according to analysis by FREEandCLEAR which offers mortgage resources and education, the historically paper-driven mortgage process costs the world about 264,000 trees every year.

To come to the conclusion, FREEandCLEAR used data from the Federal Reserve Bulletin and the Environmental Paper Network.

“When you multiply the large number of mortgages by the high number of mortgage documents, the product is a massive amount of paperwork and tremendous environmental impact,” FREEandCLEAR reported. “Specifically, 7.8 million mortgages per year times 280 pages of paper per mortgage yields almost 2.2 billion sheets of paper consumed by mortgages annually.”

And that number is likely conservative, FREEandCLEAR reported—especially when you consider the number of mortgages that don’t close every year.

“Although double-sided printing and digital documents reduce paper consumption in the mortgage process these practices are more than offset by the millions of loan applications that did not result in a mortgage as well as lenders’ internal document retention requirements,” FREEandCLEAR reported. “In light of these factors, we believe that 264,000 tree consumption figure is likely conservative.”

But the mortgage industry high paper consumption doesn’t just impact trees. According to FREEandCLEAR, it leads to other reduced resources, too.

“The environmental impact of mortgage paperwork is not limited to trees. In addition to wood usage, paper production involves considerable energy and water consumption and generates significant greenhouse gas emissions and waste.”

FREEandCLEAR estimated that the mortgage industry uses about 41,066 tons of wood, 388,115 million BTUs of net energy, and 251.3 million gallons of water every year. It also produces 21.1 million pounds of solid waste and results in the emission of 61.6 million pounds of greenhouse gasses.

“While the increasing use of recycled paper is certainly positive, there is little doubt that the mortgage industry’s impact on the environment and trees is profound.”

In related news, Bank of America shared energy-efficiency stats from its HBIR  this week. Finding include that 61 percent of homeowners have researched energy-efficient improvements; 86 percent have some type of energy-efficient products in their home. Broken down generationally, 93 percent of seniors have energy-efficient product sin their home, while 78 percent of millennials do.

Bank of America and the American Council for an Energy-Efficient Economy have put out a fact sheet on how homeowners can conserve energy. To view, click here.

About Author: Aly J. Yale

Aly J. Yale is a freelance writer and editor based in Fort Worth, Texas. She has worked for various newspapers, magazines, and publications across the nation, including The Dallas Morning News and Addison Magazine. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.
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