The Government's Mortgage Settlement Checks Bounced
The funds come from a $3.6 billion settlement the government reached with the nation's largest banks over wrongful evictions and other actions against underwater mortgage holders.
It's not clear how many homeowners received bad checks, but housing advocates coast-to-coast, as well as regulators, say they've received a flood of complaints, the pair write.
From the Times:
In recent days, problems arose at Rust Consulting, a firm chosen to distribute the checks, people briefed on the matter said. After collecting the $3.6 billion from the banks, these people said, Rust failed to move the money into a central account at Huntington National Bank in Ohio, the bank that issued the checks to homeowners.
Many banks, after spotting a phone number for Huntington on the back of the checks and confirming the legitimacy of the money, agreed to process the payments. But some credit unions, check cashers and community banks apparently looked only at the account number on the unfamiliar-looking checks and ultimately found a zero balance, the people briefed on the matter said.
The government says they believe the issue has been resolved and are urging homeowners to try again.