For some people, the mortgage crisis and the financial problems it spawned seem never to go away. From the initial finance-company, induced real estate bubble that drove the unbridled speculation that almost brought down the entire American economy, to the robo-signing foreclosure abuse, the residential real estate market has seen its share of disasters.
From foreclosure and bankruptcy, the individual borrowers have been swept along, as pawns in the global game of finance. Many have been forced into bankruptcy, having been hit with both a home that was worth far less than the mortgage loan they were obligated to repay, meaning they could not even sell it to pay off the debt. In addition, many were also struck by jobs lost in the collapsing economy, as it was dragged down by the crash of the housing market.
The most recent insult in this train wreck of a process occurred last week when settlement checks were finally mailed out. Some homeowners received the unpleasant surprise when they went to cash the checks. The checks were refused due to “insufficient funds.” Apparently, the company that was handling these settlement checks was “timing” their moving of the funds to maximize the interest they earned on the account.
It appeared they were waiting until the end of the day to place the funds in the account that the settlement checks were drawn on, so any attempt to cash them earlier could produce an insufficient funds issue.
Needless to say, for those who have experienced one problem after another related to the foreclosure fiasco, this was par for the course.
Source: New York Times, “Mortgage Relief Checks Go Out, Only to Bounce,” Jessica Silver-Greenberg and Ben Protess, April 17, 2013.