Now, as Worles attempts to collect on a legal settlement intended as a remedy to just this type of practice, she confronts a depressingly familiar predicament: The check for her share of the settlement has gone missing, too.
"It's been a total nightmare," Worles, who lives in the Detroit suburb of Allen Park, Mich., said of her effort to track down the check. It was apparently mailed months ago to the wrong address, despite her attempts to correct the mistake in advance. "It seems like such a simple fix," she said.
Worles is one of 4.2 million homeowners who qualify for a share of the $3.6 billion in cash payouts as part of the foreclosure abuse deal. And she's one of 400,000 whose checks could not be delivered because they were sent to the wrong address, according to the Office of the Comptroller of the Currency.
That amounts to 10 percent of all foreclosure settlement checks mailed so far. The return-to-sender problem could go a long way toward explaining why such checks totaling nearly $1 billion have not yet been cashed.
It's understandable that some of the people owed a check have been difficult to reach, given the nomadic lives many have lived following foreclosure. But if it turns out authorities could have made a greater effort to verify home addresses in advance of mailing out those checks, critics who have blasted the settlement as ill-conceived and poorly executed will have a new reason to complain.
"An error rate of 10 percent in the simple task of mailing checks to homeowners is shocking," said Elizabeth Lynch, a foreclosure lawyer at MFY Legal Services in New York. "But unfortunately this has come to symbolize the farce that is many of these settlements where regulators [opt] for a quick flurry in the press instead of the long-term systemic reform that is actually needed to help homeowners."
Rust Consulting, the company charged with distributing the payments to borrowers, did not respond to a request for comment.
It's been nearly six years since the mortgage market collapsed, dumping millions of Americans into foreclosure and putting unprecedented strain on an industry woefully unprepared, or unwilling, to deal with the aftermath. Thousands of instances of abuse were documented, including wrongful foreclosures and mortgage modifications rejected in error.
In 2011, more than a dozen mortgage companies, including the largest banks, pledged to conduct an independent case-by-case review of mortgages in a process known as the Independent Foreclosure Review. In January, that review was abruptly scrapped after long delays, cost overruns and allegations that the proceedings weren't as independent as claimed.
In place of the reviews, the mortgage industry pledged to pay $9.6 billion in a blanket settlement. Of that sum, $3.6 billion was earmarked for direct cash payments to homeowners who received a foreclosure notice in 2009 or 2010, and $5.7 billion was slotted for other foreclosure avoidance assistance.
From the start, housing advocates said that amount was not nearly enough to adequately compensate those who fell victim to harmful bank practices. They also criticized the deal for compensating everyone who received a foreclosure notice, with insufficient effort given to determining who was harmed the most.
In the spring, when the settlement checks started landing in mailboxes, homeowners joined the chorus, with many complaining bitterly that the sums they received were far less than what they were owed, based on their understanding of a payment chart distributed in advance -- and their notions of basic justice.
Chip Hamilton of Chandler, Ariz., said that when he approached U.S. Bank about a mortgage modification nearly five years ago, he was told that he would need to intentionally default on his payments in order to qualify. He did as instructed, but then his bank took more than a year to process his application, eventually structuring the modification in a way that made his monthly payment higher than it was before, he said.
In April, he received a $300 check through the foreclosure settlement. "It was like getting hit with a truck," he said of seeing the amount.
U.S. Bank did not respond to a request for comment.
There have been other problems with the distribution of payments. Some checks bounced, and nearly 100,000 people received checks for less than what they were due.
Worles, a nurse and a single parent who fell behind on her mortgage payments after she was badly burned in a fire, sold her home last year in a short sale, after years of pleading with Bank of America to consider her application for a mortgage modification.
In March, she received a postcard informing her that a settlement payment was forthcoming within the next few weeks, compensation for a foreclosure started by Bank of America in 2009. Her postal carrier delivered the notice, Worles said, even though several numbers in her address were scrambled.
Worles claims she called Rust Consulting several times in an attempt to fix the mistake, and was assured the address would be corrected. But her check never came. Worles said she confirmed recently with Rust Consulting that the check had been returned as undeliverable.
Worles said the company told her that she may not receive a replacement check until the end of the year.
"I don't see why it would take that long," she said. "This is bullcrap."