United Security Mortgage Corp., a medium-sized Washington-area mortgage lending firm, earlier this month bounced at least $900,000 in new and refinanced loan checks, angering several homeowners and settlement companies that were forced to wait, in some cases, up to three weeks before receiving new checks that eventually cleared.

David J. Butler, an attorney for United Security who confirmed the incidents, declined to disclose the number of checks that were overdrawn or the exact amount of funds affected by what he called "a mistake." He said "the vast majority, if not all" of the bounced checks have since "been honored."

The $900,000 figure was obtained through interviews conducted by The Post with Washington-area homeowners and settlement attorneys.

"I'm extremely concerned," said Frank Walsh, an Annapolis settlement attorney who received two checks totaling $193,000 from United Security on May 30 that bounced a week later.

As of this week, Walsh said he was still "in the hole for $193,000," adding that his bank, Maryland National Bank, which has been covering the overdrawn amount, "is getting nervous."

Butler said, "This was not intentional. It was a mistake." He explained that the overdrafts occurred during a three-day period in late May when United Security "thought they had more funds available to them than they really had."

United Security, a 10-month-old company based in California, has Maryland offices in Kensington, Greenbelt, Severna Park and Frederick. During the first quarter of this year, United Security wrote more than $9 million in new loans in the District of Columbia and Montgomery and Prince George's counties, according to Rufus S. Lusk & Son, a real estate information service. The lending firm does not operate in Northern Virginia.

Like most mortgage companies, United Security maintains a so-called "warehouse line of credit" with an investor, such as a bank or pension fund, that covers a mortgage that the lender makes with a borrower. At some point after a loan is written, the mortgage company sells the loan as part of a package on the secondary loan market.

In the United Security case, Butler said that its warehouse line of credit was lower than it thought, causing the checks to bounce. He declined to identify the financial support company for United Security.

Maryland state banking officials declined to say if they were investigating any possible wrongdoing on the part of United Security.

Perry McAtee, the examiner's supervisor of the Maryland State Bank Commission, which licensed United Security, said, "I'm not able to discuss complaints," but added, "if there were any indication that any of our lenders were involved in such activity, we'd be on top of it immediately."

Settlement attorneys were most affected by United Security's overdrawn checks.

"I was shocked," said Ronald Sinclair, president of Free State Title Co., which received five settlement checks from United Security totaling $500,000 that eventually bounced. Settlement companies generally receive a check from a mortgage company at the time of a closing on a new or refinanced loan. They then issue funds to a home seller or the original lender to pay off an existing loan.

In United Security's case, settlement attorneys did not discover that the mortgage firm's checks could not be covered with sufficient funds in an account until a week after the closing of a home sale or refinanced loan. By then, settlement attorneys already had written checks to a lender or to a homeowner.

Annapolis attorney Walsh said that "neither of my two clients even know" that the settlement checks from United Security bounced because they were not affected; Walsh paid their lenders before he discovered the problem with the mortgage company. Sinclair said settlement attorneys were caught off guard that the checks did not clear.

Sinclair said, "It's a confidence destroyer. Here we are relying on the way business has been conducted in the past. Now we must start being more careful." He said that the last of the five bounced checks his company received from United Security did not clear until this week. The final check, for $33,766, was returned for payment twice before United Security eventually issued Free State a certified check Tuesday night.

"I just got a lot more gray hairs wondering what the hell would have happened if the new checks didn't clear," Sinclair said.

Like several other settlement attorneys, Sinclair said he repeatedly had to ask United Security to issue new checks.

United Security's Butler, however, denied that his company "was indifferent or unsympathetic. . . . The company is very sensitive to what happens." He said United Security would reimburse any homeowner or attorney for penalties or lost interest incurred because of the overdrawn checks.

United Security "doesn't believe it will ever have this kind of problem again," Butler said. He said the firm is now verifying ahead of time that sufficient funds are in its accounts before writing certified settlement checks.

A Montgomery County settlement attorney, who requested anonymity, said he was forced to take out a loan to cover the $60,000 United Security check to him that bounced earlier this month.

The attorney said that if Maryland and the District had the same banking regulations as in Virginia, the check-bouncing incidents "could have been avoided."

Virginia requires a so-called "wet settlement" whereby funds must be on the settlement table at the time of closing.

While Maryland has a wet-settlement provision, the check issued at a closing does not have to be certified, as is the case in Virginia.

The District has no wet-settlement provision, although a bill that would establish such a provision has been floundering before the City Council since being introduced earlier this year.

At least one Washington-area homeowner was adversely affected when United Security was unable to cover two checks to him.

Stanley Rubin, a senior systems engineer with Sperry Corp. who lives in Olney, said it took him three weeks to get $60,000 from the May 27 closing on his refinanced loan after United Security bounced two checks to his attorney.

"More than anything, I was mad," said Rubin, who was refinancing his mortgage to pay off his first and second trusts, as well as to obtain some extra money to make home improvements and pay some bills.

Rubin said that during the three-week period he also was without any home insurance, which was canceled after his closing date and was not renewed until the refinancing check cleared.

Rubin said he kept calling United Security to find out where his mortgage check was, but "I just kept getting stories from them."

Consequently, Rubin said he gave the lender until 11 a.m. last Monday to pay his settlement money. At 11:05, after not hearing from United Security, Rubin called the Montgomery County District Attorney's office to arrange a meeting on the matter.

At 11:10, Rubin said, United Security called to tell him it didn't have his money yet, at which time Rubin mentioned his conversation with the prosecutor's office.

"Ten minutes later, they called back and said they had the funds," Rubin said.

He got his money the next day.