Bank Mortgage Calculators Overstate Mortgage Interest Deduction Says MIFSP

Testing of mortgage calculators and mortgage calculations provided on and through websites for hundreds of banks, mortgage originators, and other financial institutions and financial service providers leads to a report being released by the Mortgage Institute For Financial Services Professionals, Inc. ( www.mifsp.org ) showing many of the largest banks and thrifts, among others as direct and indirect sources of seriously flawed mortgage calculators that significantly overstate and grossly misrepresent the consumers' tax savings from the mortgage interest deduction. "We went to hundreds of websites and tested the mortgage calculators for banks from all fifty states with the largest market share of deposits in the largest metropolitan areas. Many of these calculators were shown to overstate the tax benefit of the mortgage interest deduction by as much as 300%," says Leon Morris, RMP®, Executive Director of MIFSP.
"Many of the banks tout the conversion rate of capturing prospects and converting them into 'interested and motivated' mortgage applicants as a result of using these calculators. However, someone making a rent versus buy decision, counting on the tax benefit, could be misled from the outset. The calculators we tested usually posted a disclaimer regarding the accuracy, however, due to a bank's name and reputation a consumer may not expect the calculator to be off by that much or that some basic tax considerations wouldn't be taken into account. The widespread errors found in our testing leads me to believe that this maybe the largest ongoing instance of an unfair and deceptive trade practice ever perpetrated upon the American people and American homeowners in particular. Therefore, we are making our findings known to the Department of Justice, Department of Housing and Urban Development, and Federal Trade Commission," says Morris
The report entitled "Mortgage Interest Deduction More Hype Than Help" is available at www.mifsp.org . "Faulty mortgage calculators hype the tax benefits of the mortgage interest deduction, and the providers are doing a disservice to consumers. In an effort to promote mortgages, consumers are being misled about the tax benefits of having one. In order for consumers to make better decisions, they've got to be given better information; and when it comes to the mortgage interest deduction, they're not only being miseducated, they're being misled," says Morris.
About MIFSP: MIFSP offers the only educational program in Mortgage Based(TM) Financial Planning.