More Errors in Checks Meant to Aid Homeowners
Three weeks after checks sent to homeowners as compensation for foreclosure abuses were rejected for insufficient funds, the consulting firm at the center of the mishap erred again: a fresh round of checks was written for the wrong amounts.
In recent days, according to officials briefed on the matter, Rust Consulting issued nearly 100,000 checks for less than the homeowners were owed. The mistake potentially cheated consumers out of millions of dollars they were owed under a deal reached between the government and the nation’s biggest banks.
Federal regulators ordered Rust to fix its mistake. And in a statement, Rust said late Wednesday that it had “corrected the error and plans to mail supplemental checks to affected borrowers as soon as May 17.” It attributed the mistake to a “clerical error.”
But the developments cast another harsh spotlight on Rust, which had been selected as the distributor of checks for the $3.6 billion settlement deal that regulators struck with the banks. The continued problems with Rust also raised questions about the government’s oversight of the firm and the wisdom of hiring it in the first place.
What’s more, some homeowners complain the problem is broader than Rust has acknowledged. Jennifer Lawson, whose husband is on active duty with the Navy, said she was stunned when she received a check on April 19 for $600. Under the terms of the settlement deal, Ms. Lawson expected thousands of dollars in compensation for her foreclosure.