According to Forbes, while it sounds like it’s the Too Big To Fails that are footing the bill for mortgage settlements, turns out it’s not so much Bank of America on the hook so much as ordinary America, Forbes reports.

If you invest in a retirement account or rely on a public pension, you may find yourself footing the bill for the U.S. Government’s recent spate of headline mortgage settlements with the nation’s largest banks.

While the settlements promise billions in consumer relief, average consumers – and not the banks – are picking up a significant share of the tab.

For evidence of the trend, look no further than Bank of America‘s (BofA) recent $17 billion settlement with the U.S. Department of Justice (DoJ). BofA promised to pay off more than 41 percent of the fine by providing consumer relief, which includes lowering mortgage payments for certain borrowers. The catch is that BofA doesn’t have to actually own the mortgages it intends to write down.

The question at hand is, if BofA doesn’t own these mortgages, who does? And the most likely answer is, you.


In the case of the $25 billion National Mortgage Settlement, mortgage investors were on the hook for 41 percent of BofA’s consumer relief bill and 32 percent of JPMorgan’s by year-end 2012. Still, even this is an improvement from Countrywide‘s maiden $8.4 billion agreement with 44 states in 2008. It shelled out nearly all of the relief from that deal at the expense of retirees and others because it only owned 12 percent of the affected mortgages, Debtwire reported at the time.