Foundation to benefit from Bank of America settlement.
The Florida Bar Foundation will be among the Interest on Lawyers Trust Account (IOLTA) programs around the country receiving a portion of the proceeds from the $17 billion settlement the U.S. Department of Justice entered into in August with Bank of America.
Of the settlement amount, $7 billion is allocated to consumer relief, with a minimum of $30 million allocated to IOLTA programs for the provision of foreclosure prevention legal services and community redevelopment legal services.
Each IOLTA program in the 50 states, the District of Columbia, and the U.S. territories will receive $200,000, and the remainder of the $30 million will be distributed to IOLTA programs based on poverty population. It will likely take at least a year for these funds to be distributed to the programs.
Two other provisions of the settlement have the potential to provide more funding to IOLTA programs in years to come. If by December 31, 2018, there are funds that have not been distributed from the $7 billion for consumer relief, those "liquidated damages" will be distributed with 75 percent going to IOLTA programs based on poverty population for purposes also restricted to foreclosure and community redevelopment legal services. The other 25 percent would go to NeighborWorks America, which creates affordable housing opportunities.
A provision in another portion of the settlement sets aside $490 million for a tax relief fund for those borrowers who, due to their mortgage debt being eliminated, have added tax liability. Federal legislation that lapsed at the end of 2013, the Mortgage Forgiveness Debt Relief Act, waived this tax liability, but Congress may enact retroactive legislation to restore the tax waiver. Whatever is left in this fund will be allocated according to the same formula as the provision related to liquidated damages.
At this time, it is impossible to know the additional amount these two provisions could yield for Florida's Interest on Trust Accounts Program, which is administered by The Florida Bar Foundation.
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|Publication:||Florida Bar News|
|Date:||Oct 1, 2014|
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