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What happens to money if checks cut for creditors expire in debt refi?


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Recently I refinance my home for debt consolidation. The lender cut checks for my creditors. However they cut them in the wrong names and wrong amounts. Siince I got no reponse from my loan officer for 3 weeks time is running out. The checks the escrow company cut for these bills to get paid will expire on Aug. 15th. I have been trying to obtain payoff letters from the collection companies and settlement offers too. Some have sent me letters but some of them haven't.

So my questions is what happens to the money that they cut a check to a junk debt buyer for one of my old old debts which has the wrong amount. I have'nt been able to get them to send me a letter with the correct amount to no avail.

Its my money I borrowed in my refiance and I am paying a high interest rate on this money too. So if I am not able to get a letter to have the lender have the escrow people cut a new check before the check I have expires, where the money go? I am hoping they will give it back to me so I can use it to pay about 10 more creditors and stop them from hitting my credit report.

At this point the check amount is for almost $9000 and the debt is set to go off of my credit report next year. So since I am getting no cooperation from the junk debt collector it looks like the check I do hold will be no good soon.

Don't they then have to cut a check to me for any left over money that was set aside to pay my bills?

My loan officer is a piece of ****. She snowed me from the beginning and I knew she was doing it but it got to far gone and I had to sign. I told her the amounts they had earmarked for my debts were incorrect and the names were wrong. She said oh just sign and then after closing we will go back thru and I will explain it to my boss and get him to give me the money.

After closing she or her boss wouldn't take my calls or emails for 3 weeks. Finally I got ahold of some one at their main office and they told me what I needed to do. But now time is running out and the checks will expire.


Please if anyone has an answer for me please email me at LisaHouser@sbcglobal.net. I don't want to call my loan officer as I don't trust her. It was a really bad loan but I was high risk and too close to losiing my home so I didn't have a choice but to close with her.

I am working on my credit report and am having success getting old debts deleted so I can do another refi in a year.

THank you,

Sharon Mohr

I am in the state of Nevada and the loan is with NationStar Mortgage based in Texas but the office I delt with is in Arizona :confused:

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How was your closing handled? Did you use a Real Estate Attorney or a Title Agency? There should have been an impartial party involved to handle the details of the transaction. This person or agency is the one that actually cut the checks and will be the one to cut a new one...in your name. Then you can do whatever you see fit. Outstanding checks are a problem for their business as it causes their books not to balance. State regulatory agencies dislike messy escrow accounts. Since this business has a vested interest in clearing the matter, you can seek assistance there.

As you said, you are paying for access to these funds.

It should have nothing to do with your LO or the broker. They are totally unconcerned now that they've received their commission.

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The lender used an escrow company back east. I have been in touch with her and she says that the lender has to instruct her as to what checks to cut. SHe says she can't do anything with the money unless the lender tells her to.

What happened was the lender cut 10 checks to my creditors during the closing of my refinance loan. They put the wrong names on the checks and wrong amounts. So I got some letters from the creditors with the new settlement amounts and sent them back to the underwriters or they say their research department. Now I am waiting for them to fax to the escrow people the new amounts and names. Then there will be left over money and that I will get.

But I have a few checks that I can't get the junk debt collector to send me a letter that the bill was paid and the checks are due to expire August 15th. I need that money to pay a bunch more bills before they show up on my credit report.

Here the loan officer I used told me how to fix my credit report and I have been doing that now for 2 months. It is working I have gotten 8 bad things deleted. However she knew that I had other old bills not yet listed on my credit report and I need that money to pay them. Well so far one now has popped up on my credit report since it is taking so long.

I guess I will try and talk to the escrow company gals supervisor and see if that helps. THe gal is nice but says her hands are tied.

Don't they legally have to give me the money once the checks expire?


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"...Don't they legally have to give me the money once the checks expire..."

One would think so. Once again, escrow accounts and mortgage closings are tightly regulated by state governments. The escrow company may indeed be telling you the truth and have 'tied hands'. You can always call their regulatory agency, ask questions and lodge a complaint, if necessary. I also think speaking to a supervisor/manager/owner is a good idea.

Your situation may be state-specific. In Florida, it's easy to keep the checks after closing for a time, then inform the lender that they were returned as undeliverable and request that they be reissued to YOU for disbursement. Yes, the escrow company must follow standard procedure. But once they've done that, all further efforts need to be streamlined for the very reasons you list. You may just have to stomp your feet and hold your breath to get some service. You also have the option of consulting a real estate attorney. I wish you luck!

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  • 3 weeks later...

Depending on the company, I had a closing delayed by 30 days when a buyer had last minute repossession. The buyer had to refinance, I imagine it was due to a droping score...we closed... and she lost the house in less than a year...

Second house almost closed and the mortgage company found the seller lied about being married and that voided the contract....

Just be careful ok, sounds like your juggeling now....

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