BofA Tax Set-Aside, Wylys Penalty, Fed Patience: Compliance
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Bank of America Corp. must set aside $490 million of its Aug. 21 $16.7 billion settlement to cover taxes that borrowers face on forgiven mortgage debt -- a step taken by the Justice Department to give homeowners relief that Congress has failed to provide.
The bank’s accord with U.S. and state authorities to settle claims over flawed bond sales is the first major settlement to include funds to be used in case lawmakers don’t extend forgiveness on home-loan debt reductions. The tax credit expired on Dec. 31.