Fed announces mistakes made in mortgage settlement

WASHINGTON (AP) — The Federal Reserve says some 96,000 borrowers who received checks to compensate them for wrongful foreclosures on their mortgages will be getting an additional check to correct for errors in the initial payment.

The Fed said the affected borrowers received initial compensation amounts that were too low because of errors made by Rust Consulting, the company handling the payments.

The new checks will make up the difference between the amounts that should have been paid and the lower amount paid by Rust. Borrowers are being told to cash both the original check and the new checks, which will be mailed around May 17. The borrowers affected had loans serviced by former subsidiaries of Goldman Sachs and Morgan Stanley.