How much will Bank of America’s expected US$17 billion mortgage settlement cost the company? The answer is, almost certainly not that much.
In mega-settlements negotiated with the government, a dollar is rarely worth an actual dollar.
Inflated figures make sensational headlines for the Justice Department, and US$17 billion would be the largest settlement by far arising from the economic meltdown in which millions of people in the United States lost their homes to foreclosure. But the true cost to companies is often obscured by potential tax deductions and opaque accounting techniques.
