A consulting firm hired by banks and suggested by regulators to sort out a foreclosure settlement deal issued checks in improper amounts, depriving homeowners of thousands of dollars, the New York Times reports.
Regulators suggested the banks hire Rust consulting firm despite a mixed track record and one bank suggesting an alternative firm
Issues arose after homeowners were wrongly evicted. Rust consulting firm was selected as the distributor of checks in the $3.6 billion deal.
When at least one bank suggested an alternative consulting firm for the foreclosure settlement, regulators balked, according to people briefed on the matter. The regulators instead suggested that the banks hire Rust.
But problems emerged soon after the settlement was announced in January. The consulting firm, officials said, delayed the checks for weeks as it struggled to gear up for the payments. Once Rust issued the first round of checks in April, it failed to move money into the bank account used for the settlement, preventing some homeowners from cashing their checks, according to a report in The New York Times.
More recently, homeowners have complained about clerical errors at Rust, problems like sending checks to the wrong addresses and issuing checks to deceased borrowers.
