Sorry guys..I've been busy trying to fix the problem this past week and finally have time to give an explanation and update.
We sold our house in Houston in early September. We had a traditional mortgage and then a subordinate SBA loan from our Harvey rebuild that needed to be paid off from the proceeds of the sale. I honestly did not know what we owed on the SBA loan. I've sold two other properties on which SBA added themselves as 2nd lien holders when we secured the original loan and 100% of the proceeds from those sales went towards the principal on the SBA loan. That plus paying $850/mo on a 1.5% loan over 5 years...I never sat down and figured out what the balance would/could/should be.
Pre-closing, the title company does their title search and sees both loans and adds the payoff amounts to our side of the closing statement...standard stuff. They posted the SBA payoff at ~$62k. We close, we get the balance of funds at closing, and all is well.
Last weekend, we receive a written notice from SBA forwarded from our old mailing address that we haven't made a payment since August, here's your late fee, etc. on a balance of $157k. I call the SBA and the only activity on our account since our August payment was a payoff letter to XXXXX Title Co on Sept 6th in the amount of $157k. No record of a ~$62k payoff letter, $62k payment from the closing statement, no full payoff, nothing….nada. On Monday morning I get ahold of the title company and they have transaction numbers, records, etc. for a payment to SBA in the amount of ~$62k...all looks good and correct from their end but they'll look into it.
Turns out, the title company posted someone else's SBA payoff letter with the wrong account number and the wrong payoff amount (~$60k not $157k) to OUR closing file, inserted their payoff amount on our closing statement, and actually sent that payoff amount to the SBA and paid off someone else's loan with our funds.
Their reaction on Tuesday afternoon after I reached out on Monday morning was: "It seems we made a mistake. We are working with the SBA to apply the funds to your account. You were overpaid at closing and owe us $95k immediately. Will you be paying with a cashier's check or will you be wiring the funds?"
Before I paid back the money, I wanted to contact an attorney to make sure I wasn't covered from their error by some sort of errors & omissions insurance, law, statute, etc. Alas, it seems they are immune from their own errors and I do not get to keep the overpayment. And no one seems to want to answer my hypothetical question, "what happens if I've already blown that money on hookers and blow in Vegas?"
That's the story…sorry for the week+ of silence.
