|If no space for initials and borrowers want to initial, I let them.|
HOWEVER I have had packages with Specific Instructions printed on RED paper, do NOT initial where initials are not required. I show the page to the borrowers, who are usually quite happy not to initial when they look at the 120+ pages of the pile 'o papers to go through.
I have also had instructions to have every page of the note & mortgage initialed, even though there are no lines for initials.
Simple Rule of Thumb: With every package, read the instructions and follow them. When in doubt, ask.
I have never had a packaged rejected or a complaint using this system.