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Th e M Rep o RT | 23 Feature The Answer for Accurate Property Tax Estimates I ncorrect property tax estimates not only affect the borrower or prospective borrower, but such inaccuracies can also increase costs for lenders and other mortgage professionals who must ultimately recalculate and address tax amounts. In addition, customer dissatisfaction can impact different areas of the business, putting other current or future relationships at risk. Unfortunately, using a standardized formula, such as 1.25 percent of the purchase price in California will not work; it will not produce the level of predictable accuracy that both mortgage professionals and borrowers need. Using previous owners' tax bill amounts will not work in several other large states either. At the same time, achieving a more precise real estate tax estimation can result in savings of hundreds of dollars per loan and avoid thou- sands of customer complaints. Instead of using a standardized formula, the answer lies in using systems that look at the individual data elements that make up a property tax bill in each state, on a county-by- county basis, and then applying business rules and automation to determine which elements are static, which elements can vary, and which elements are one-time-only assessments. By drawing on locally available information and using systems to interpret that data, mortgage professionals can create a precise estimate of a new tax bill. Added Benefits of Comprehensive Property Tax Estimation T aking this kind of comprehensive approach to property tax estimation has the additional advantage of providing a clear view into how taxes are calculated as part of the debt-to-income equation. And, since the approach is consistently applied and produces accurate results time after time, estimates are on target and borrowers know what to expect, which increases customer satisfaction. The mortgage industry deals with many complex problems every day—some that are very difficult to resolve. With the right technology and information, the problem of producing an accurate property tax estimation has a ready solution. Mark Collins is SVP of the Property Tax Direct product line at Black Knight Financial Services.