Verdicts & Settlements

Some checks issued to homeowners in foreclosure settlement are bouncing

Banking regulators are urging homeowners to try once more to deposit settlement checks that bounced on the first try.

The checks were issued as a result of a $3.6 billion settlement in January with the nation’s largest banks, according to the New York Times DealBook blog. The banks agreeing to the settlement had been accused of wrongful evictions and other foreclosure abuses.

It’s unclear how many checks bounced.

Housing advocates and regulators say they are fielding many complaints and questions about the checks, the article says. But the firm hired to distribute the checks, Rust Consulting, said it was aware of only “12 situations.”

By late Tuesday, homeowners had successfully cashed or deposited about 342,000 checks, according to regulators. That represents about 25 percent of the checks issued.

People briefed on the matter told DealBook that Rust Consulting failed to move the settlement money into a central account at Huntington National Bank in Ohio in time for the checks to be cashed. Regulators say the problem is now solved.

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