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Checks for wrongly foreclosed bounce

April 17, 2013 at 4:08 PM   |   Comments

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WASHINGTON, April 17 (UPI) -- The U.S. Federal Reserve is assuring borrowers sent relief checks as part of a multibillion-dollar settlement over foreclosure abuses funds are now available.

Some of early relief checks sent under the Independent Foreclosure Review bounced because of insufficient funds and the Fed's consumer hotline advised the checks could not be cashed Tuesday.

The Fed said in a statement Wednesday the paying agent, Rust Consulting Inc., and the paying bank, Huntington National Bank, had rectified the problem.

"We apologize to anyone who experienced problems trying to cash their checks," Rust Consulting senior executive James Parks said in a statement.

The Fed and the Office of the Comptroller of the Currency last week began sending payments to 4.2 million borrowers as part of a $9.3 billion settlement with the nation's biggest banks related to troubled mortgage loans.

The first round of checks was mailed last week and more than 50,000 borrowers have already cashed or deposited the checks, regulators said.

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