As part of the record $16.65 billion settlement between Bank of America (BAC) and the U.S. Department of Justice, approximately $7 billion is designated to provide relief to consumers. However for the borrowers that reap the rewards from BofA, there could be something that severely dents the promised relief funds…a huge tax bill.
In a statement, the U.S. Department of Housing and Urban Development outlined how some of that money will be disseminated to the consumers.
“The $7 billion in consumer relief will focus on areas that were hardest hit during the housing crisis,” HUD said. “Consumer relief will take various forms including loan modification for distressed borrowers, including FHA-insured borrowers, and new loans to credit worthy borrowers struggling to get a loan in hardest hit areas, borrowers who lost homes to foreclosure or short sales, and moderate income first-time homebuyers.”