Taxpayers to ease bank costs
Deals with u.s. over mortgage gaffe will be tax-deductible
WASHINGTON — Consumer advocates have complained that U.S. mortgage lenders are getting off easy in a deal to settle charges that they wrongfully foreclosed on many homeowners.
Now it turns out the deal is even sweeter for the lenders than it appears: Taxpayers will subsidize them for the money they're ponying up.
The Internal Revenue Service regards the lenders' compensation to homeowners as a cost incurred in the course of doing business. Result: It's fully tax-deductible.
Critics argue that big banks that were bailed out by taxpayers during the financial crisis are again being favored over the victims of their mortgage abuses.
"The government is abetting the behavior by not preventing the deduction," said Sen. Charles Grassley, R-Iowa. "The taxpayers end up subsidizing the Wall Street banks after the headlines of a big-dollar settlement die down. That's unfair to taxpayers."
Under the deal, 12 mortgage lenders will pay more than $9 billion to compensate hundreds of thousands of people whose homes were seized improperly, a result of abuses such as "robo-signing." That's when banks automatically approved foreclosures without properly reviewing documents.
Regulators reached agreements this week with Goldman Sachs and Morgan Stanley. Last week, they settled with 10 other lenders: Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, MetLife Bank, PNC Financial Services, Sovereign, SunTrust, U.S. Bank and Aurora. The settlements will help cut huge potential liabilities for the banks.
- BYU grad strikes gold teaching via online...
- San Diego Comic-Con tells Salt Lake...
- Healing souls, healing a mountain
- Dave Ramsey says: Don't leave an estate with...
- Plan to simplify 2015 health renewals may...
- Fast food workers vow civil disobedience
- Does getting married really increase wealth...
- Balancing act: Survey says lack of balance,...
- Renewable energy advocates decry... 18
- Fast food workers vow civil disobedience 12
- Dave Ramsey says: Don't leave an estate... 9
- Does getting married really increase... 8
- San Diego Comic-Con tells Salt Lake... 8
- BYU grad strikes gold teaching via... 7
- Balancing act: Survey says lack of... 4
- 3 ways you can save money on movie... 3