Banks pay for mortgage abuse – with rubber checks

(Newsletter)
It took homeowners years to get even the relatively small checks given to them for mortgage abuse in a $ 3.6 billion settlement with some of the largest banks in the country – and when they finally got there this week, many clashed from them immediately, reports the New York Times. “Is that real?” asked a former homeowner who waited three years for his $ 3,000 check only to learn that funds were “unavailable”.

Rust Consulting, which handled the settlement, collected the $ 3.6 billion from the banks, but apparently failed to actually deposit it with the bank that wrote the checks. Some officials say Rust has a habit of hanging on to money that some believe is an attempt to earn interest on it. The company doesn’t know how many checks were rejected – only 12 known incidents – but only 50,000 of the 1.4 million checks were successfully deposited. (Read more mortgage stories.)

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