The first wave of checks sent to borrowers under the Jan. 7 settlement between federal regulators and 13 major servicers got off to a bad start: Some of the checks bounced.
‘Some early recipients of checks informed the Federal Reserve's consumer helpline on Tuesday that they were told their checks could not be cashed,’ said the Federal Reserve in a press statement. ‘Members of the [Fed] staff contacted the paying agent, Rust Consulting Inc., and the paying bank, The Huntington National Bank. Rust subsequently corrected problems that led to some checks being rejected.’
The Fed added that this situation should not occur again.
‘The paying agent for checks being sent to borrowers under the Independent Foreclosure Review has assured the Federal Reserve Board that early problems with some checks have been corrected and that funds are available to cash all checks,’ said the central bank.
Payments began to 4.2 million borrowers on April 12. The Federal Reserve says that more than 50,000 people have already cashed or deposited checks.
