For lenders with a portfolio of adjustable-rate mortgages that are concerned about the problem of erroneous adjustments to interest rates charged on the loans, the litigation involving Northeast Savings provides a cautionary tale.

Industry concern about misadjustments is well founded. For example, an Oct. 30, 1990, letter from the General Accounting Office to Sen. Richard G. Lugar, R-Ind., cites studies estimating that 20% to 35% of all adjustables nationwide have adjustment errors.

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