How taxpayers are subsidizing Bank of America's $16 billion mortgage settlement
This week, Bank of America agreed to a $16 billion settlement to resolve charges that it had sold toxic mortgage-backed securities to investors in the run-up to the 2008 financial crisis. It's "the largest settlement ever reached between the U.S. and a single company," writes The Wall Street Journal, and the government is touting the enormous price tag as evidence that it has cracked down on pre-crisis malfeasance.
But it's not so straightforward. The New York Times reports that BofA has already written down many of its mortgages, easing a requirement under the settlement that the bank aid struggling homeowners to the tune of $7 billion. Furthermore, some portion of the settlement will ease BofA's tax bill:
Talk about too big to fail.
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Ryu Spaeth is deputy editor at TheWeek.com. Follow him on Twitter.
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