Some of the foreclosure checks bounced.

A bunch of big banks agreed to a $3.6 billion legal settlement a few months ago to halt a review of improper foreclosures. Under the settlement, checks will be sent to more than 4 million homeowners who lost their homes to foreclosure in 2009 and 2010.

The first wave of checks was sent Friday. And, according to the Federal Reserve, at least some of them bounced. The Fed phrased it this way: ‘Some early recipients of checks informed the Federal Reserve’s consumer helpline on Tuesday that they were told their checks could not be cashed.’

The Fed says the problem has been solved.

Screwing up for fun and profit

This is the latest episode in a long tragicomedy in which banks, regulators and consultants rival the Keystone Cops in ineptitude. Those banks, regulators and consultants have excelled at only one thing: protecting one another. Meanwhile, borrowers are abused repeatedly.

The biggest abuse came in the form of improper foreclosures, in which banks’ law firms fabricated and robosigned documents. Then the regulators ‘got tough,’ if by ‘got tough’ you mean, ‘Let the banks choose the consultants who would review paperwork to identify abuses, then let the consultants dawdle and delay.’
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