April 18, 2013 -- 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."

This is what happens when regulations to protect consumers are considered a nuisance or an inconvenience to banks. That's the political culture we inhabit, and this is what we get.

'Sorry about losing your house. Here's a small check.' After lining the pockets of the "independent consultants" with $2 billion for not doing much, the regulators and banks said the process of identifying lender wrongdoing was too slow and expensive. So regulators and banks cooked up the foreclosure settlement, in which former homeowners will be paid between $300 and $125,000, whether or not they were foreclosed on improperly.

Would you expect the checks to be sent by the banks or by a government agency? If so, you don't think like a bureaucrat. The checks come from a company called Rust Consulting Inc. So if you get a letter from Rust Consulting, don't throw it away unopened. It might contain a valid check.

At least they got the phone number right

According to the Fed, the bouncing checks show Rust Consulting as the paying agent, drawn on an account at The Huntington National Bank. After borrowers called the Fed's complaint line Tuesday, "Rust subsequently corrected problems that led to some checks being rejected," according to the Fed.

The Fed says it "encourages borrowers who have concerns or experience difficulties cashing their checks to call Rust at (888) 952-9105."

Yes, I checked the number to make sure the Fed didn't give out the wrong one.

Do us all a favor, please

I have a request for people who have received checks from Rust Consulting. Could you please take a picture of the envelope and email it to me? Cover up your address first. I want to post a picture of the envelope, so folks will know what to watch out for. It's hlewis@bankrate.com.

Follow me on Twitter @HoldenL.

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