A Minneapolis company is at the center of a snafu involving 1.4 million mortgage relief checks that were sent to borrowers across the country.

The company, Rust Consulting, was chosen by federal regulators to distribute checks to more than 4 million homeowners who lost their homes to foreclosure in 2009 and 2010 and are entitled to a cut of a $3.6 billion settlement with 13 companies that service home loans—lenders accused of wrongful evictions and other infractions related to improper foreclosures. The payments reportedly range from $300 to $125,000 and they will be distributed through July.

On Friday, approximately 1.4 million checks were sent in a first round of payments covered under the foreclosure settlement. But Rust Consulting said that when recipients began to try to cash their checks, they bounced because of “insufficient funds.”

In a Rust-issued press release, the company didn’t specify how many people experienced problems, although the firm told The New York Times that it was “aware of 12 situations.”

But the snafu prompted the U.S. Federal Reserve to issue its own press release Wednesday, which indicated that some early recipients told the agency’s consumer helpline on Tuesday that they were informed their checks couldn’t be cashed. Meanwhile, housing advocates from across the country have been reporting that they’ve received numerous complaints and questions from frustrated homeowners trying to obtain the money they are owed.

The Federal Reserve said that it contacted Rust, which subsequently corrected the problems. The agency and Rust both said the funds are now available and all checks can be cashed, although the Federal Reserve said it “will continue to monitor the payments closely . . .”

“We apologize to anyone who experienced problems trying to cash their checks. We are working hard and communicating with the banking regulators, the servicers, and other banks to ensure those issues are not repeated,” Rust Consulting Senior Vice President James Parks said in a prepared statement. “We want to assure the public that checks we have mailed under the Independent Foreclosure Review Payment Agreement process are valid.”

According to the Federal Reserve, more than 50,000 people have already cashed or deposited their checks.

A Rust representative didn’t return a Thursday morning phone message seeking more information, and the company was directing all media to a recorded phone message, which said that “employees are not authorized to speak with the press concerning this matter.”

A New York Times report, citing unnamed “people briefed on the matter,” said that after Rust collected the $3.6 billion from the banks, it failed to move the money into a central bank account at Huntington National Bank in Ohio, which issued the checks to homeowners.

Many banks reportedly agreed to process the payments after seeing a phone number for Huntington on the back of the checks and confirming the legitimacy of the money. But some credit unions, check cashers, and community banks looked only at the account number and found a zero balance, the unnamed sources told the newspaper.

Rust has been a middleman in a number of class-action lawsuits and government settlements, and this isn’t the first time that concerns about it have been raised. The New York Times said that in 2006, when it helped distribute payments from a class-action case involving title insurance costs, some consumers complained that the checks bounced.

Some unnamed officials reportedly claim that it’s common for Rust to keep accounts empty. The firm often fills requests for payment at the end of each day so that it doesn’t lose access to the money, and some have questioned whether the firm holds onto the cash to earn interest throughout the day, The New York Times reported, noting that others have said it might be hard to move a multibillion-dollar sum into a single account.

Rust Consulting handles class-action settlement administration for clients in the legal, public, and business sectors. Its services include project management, notification, claims processing, contact center services, fund distribution, and tax reporting. It claims to have experience working on more than 4,000 cases that together involve billions of dollars. In addition to its Minneapolis headquarters, it has offices in Faribault; Los Angeles; Melville, New York; Palm Beach Gardens, Florida; San Francisco; and Washington, D.C.