Federal Reserve Admits to Errors in Mortgage Settlement Checks
The Federal Reserve announced May 8 that some 96,000 borrowers who received checks as the result of the $9.3 billion national mortgage settlement soon will be getting additional checks to correct errors made in the initial payments, The Associated Press reported.
The Fed stated that more than 44 percent of the 217,000 compensation checks mailed to borrowers had errors.
Many original payments were too low due to errors made by Rust Consulting, which is the outside company hired to handle processing and dissemination of the compensation. The Fed has advised borrowers to cash both the initial checks and the checks being mailed out to make up the difference. Affected borrowers were those who had loans serviced by former subsidiaries of Goldman Sachs and Morgan Stanley, the AP reported.
New checks will be mailed around May 17.
The payments are part of the settlement reached between the federal government and 13 of the nation’s largest banks in January. Banks agreed to pay billions in cash and through reductions in mortgage balances for borrowers who either lost homes or were at risk of foreclosure during the robo-signing scandal of 2009 and 2010.