Although Bank of America (BAC) and the U.S. Department of Justice finally reached a $16.65 billion settlement, the billions of dollars going toward consumer relief comes with some financial hurdles, according to an article in The Boston Globe. The problem: some consumers might have to pay taxes on the debt that’s forgiven, the article noted. 

However, this did not go unnoticed in the settlement.

‘‘That’s why the Department secured a commitment from Bank of America to pay a portion of the settlement — over $490 million — to defray some of this tax liability,’’ Attorney General Eric Holder Jr. said in a statement announcing the deal. ‘‘And our settlement requires the bank to notify all consumers of the potential tax liability.’’

To help pay such liabilities, the settlement has a 25/25 Tax Relief Fund. Once the mortgage debt is forgiven, 25 percent of the value of that relief will be made available to help offset any tax liability for the borrower, up to $25,000, West said.

The settlement included $7 billion worth of consumer relief, with a focus on helping borrowers in areas that were the hardest hit during the crisis.

“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,” the U.S. Department of Housing and Urban Development said.

In Florida alone, nearly 17,000 Floridians will receive an excess of $1 billion in relief from the settlement.

Meanwhile, this might not be the only struggle homeowners face. Homeowner advocacy groups complain that similar settlements do little to benefit those actually harmed by the subprime crisis.

In one such announcement, from The Home Defenders League, the recent boom in the transfer of mortgage servicing rights came into play:

"Organizations representing struggling and “underwater” homeowners say that help from [the]$13 billion settlement with JPMorgan Chase has yet to arrive. And housing counselors and homeowners have not noticed any new wave of modifications. Rather, they say, Chase and other major banks seem to be seeking to get such loans off their hands by transferring servicing rights to newer mortgage companies not covered by major mortgage settlements."