“At least these checks cleared,” I love the way these two columnists start this article, however, the results of this Rust Consulting Fiasco is no laughing matter. This has effected not just Platinum Elite Clients, it has effected homeowners across the nation that expected some type of relief from a Global Settlement between the Federal Government and 13 Institutional Lenders. This Settlement as described in the article was deemed ” The National Mortgage Settlement” and was created to assist in bring relief to homeowners that had been wrongfully filed against or wrongfully foreclosed upon by the participating lenders. The National Mortgage Settlement is being managed for these 13 lending institutions and overseen by government regulators by Rust Consulting. Though its intial intention was to bring relief to homeowners it has been in the media for its mishaps more than it’s successes and these errors are documented. What we wanted to do is start tracking these Errors and enumerate these mishaps to see how far or how long it takes for this to get enough attention to be resolved. Let’s take a look at the “Mishaps” one at a time;
- “Slow to alert borrowers to expected payments since settlement was announced in January.” Checks not issued until April.
- “Rust delayed the checks for weeks as it struggled to gear up for the payments.” They knew since January and were not ready until April, Three months and they weren’t prepared.
- “Once Rust Consulting issued the first round of the checks in April, it failed to move money into the bank account used for the settlement.” So, checks were returned for insufficient funds. Who pays the NSF fees?
- “Homeowners complained about clerical errors at Rust Consulting, problems like checks sent to the wrong addresses or issued to deceased borrowers.” This, after being contacted numerous times by individual homeowners. Furthermore, one of our staff here called for personal reasons and found that the addresses they are using are the foreclosed property address unless they have been notified otherwise. Last we checked, once a foreclosure happens, you are most likely not still living in the property. Past foreclosed homeowners may need to contact The National Mortgage Settlement Program, directly.
- The newest “Fiasco” lumped together, “sending out checks in the wrong amount,” and, “failed to follow the payout plan.” This is even more interesting as 11 of the 13 banks adopted a “Metric” to calculate payouts to harmed homeowners. Read further and you will see that this “Metric” and what phase the “Harmed Homeowner” was in determines the amount of the payout to the injured party.
- As Reported by the NYTimes, “Mr. Cummings, the Congressman from Maryland, noted that Rust Consulting does not include an explanation of what homeowners are owed under the settlement.” With no mention of this “Metric”, what you may be owed, or why you even received the payment as a part of “The Worst Settlement Ever,” how are you to know if you were reasonably compensated from this $3.6 Billion Dollar Settlement?
- “Space reserved for next Mis-hap?” It’s going to happen, the Fed is already asking for an investigation according to Reuters.
My last question after recapping, and we will keep tabs on this, is who gets the interest on $3.6 Billion Dollars while we wait for Rust Consulting to figure out how to fix these problems, or as the Naked Capitalism Blog mentions, “Errors by Design,” you have to wonder, don’t you?
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- Oops (huffingtonpost.com)
- Foreclosure settlement checks bounce, then show up inaccurate (bizjournals.com)
- After Bouncing Checks, Now The Government Is Sending Mortgage Settlement Checks In The Wrong Amounts (businessinsider.com)
- Independent Foreclosure Review Payments Amount to Comedy of Errors (mortgagenewsdaily.com)
- 96,000 mortgage borrowers shortchanged (money.cnn.com)
- See a foreclosure check envelope (bankrate.com)