In general, I agree with you that you should just print on whatever paper size the package calls for. What I will do sometimes is print the lender copy in legal size and the borrower copy in letter size with the print condensed so they still get the whole thing. What is REALLY stupid is when they have a 150 page package with 149 pages letter size and 1 page legal size. If it is something like just instruction pages in legal size, I'll sometimes condense that down.
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