After performing further research, it appears that TurboTax has implemented a literal translation of the procedure in IRS Publication 936. https://www.irs.gov/pub/irs-dft/p936--dft.pdf
That Publication describes the 3 categories of mortgages (pre 10/13/87, 10/13/87-12/16/17, and post 12/16/17). But it fails to distinguish between mortgages carried concurrently, and two different mortgages, where the 2nd refinances the 1st. I understand the reasoning behind using an averaging method to calculate the deductibility of two concurrent mortgages, but I don't think this procedure is meant to apply to the latter situation. I'll need to consult an accountant or the IRS on that one.
