IRS Problems on POA Interest Payments?

We heard an interesting story the other day about poor servicing practices on payment option ARMs and the Internal Revenue Service. The story, not yet confirmed, goes like this: a servicer down in Texas is processing POA loans, improperly reporting to the IRS how much interest a consumer is paying on his mortgage. Why might this be a problem? Answer: mortgage interest payments are tax deductible and if a servicer is incorrectly reporting interest paid that means the U.S. Treasury could be coming up a little short (or maybe getting paid too much) in revenue. Will this be the next 'shoe to drop' in the national mortgage servicing scandals? Will a powerful House or Senate Committee chairman take this issue by the horns and launch a full scale investigation into POA servicing practices? Don't hold your breath…