I have situation similar to JohnSoPA. I recently refinanced my house to receive cash out for renovations. I was working with a loan officer from Americash for about two months before I decided to refinance. I was very hesitant because of a prepayment penalty that I had with my old mortgage. My loan officer requested pay off statement, which I never saw. Since he was in California and I’m in Florida. All our dealings were over the phone. Every discussion we had he led me to believe that the terms of my new loan took into account the prepayment penalty. My loan closed on May 18, 2005, my loan funded and I received the cash-out check which I deposited into my checking account on June 3, 2005. On June 7, 2005 I received a call from the Title Company stating that they issued a stop payment on the check they sent. They informed me that my mortgage payoff amount was short by $10,000.00, which is the prepayment penalty. To make a long story short, the check cleared before they were able to stop payment and they want me to return the money. I feel that the mortgage broker to make the loan more attractive misled me. I received $25,000.00 cash-out, if I would have known that I was only going to receive $15,000.00 I would have not proceeded with the loan. Now, I’m stuck with a loan that is not beneficial for me and I cannot cancel because it’s too late and I have to return $10,000.00. I do not think I should have to return to money. It was not my mistake, and I need that money for valid improvements to my house, which include Hurricane security windows considering that I live in Miami that is a priority. What should I do?

Something doesn't add up here..... no pun intended. All this had to be disclosed to you and with your approval.

With that said.... it may not be too late. If you feel that you were misled, and can prove it, call the mortgage company and tell them you want this recinded and all $$ returned... like it never happened. Tell them you are going to call the banking commissioner.

They will most likely tell you it's too late and say there is nothing they can do....... but work your way up the food chain... right up to the top.
Sometimes a company will nullify a loan and make the customer happy even if it costs them money so that they don't have to put up with the trouble of investigations, etc.

It is unfortunate that your lender did this to you but you will most likely end up paying the $10K sooner or later (plus daily accrued interest). If you aren't going to pay it back willingly, I would get an attorney asap. You most likely signed a document with the title company that would allow them to sue you for the $10K eventually. I am surprised that you did not see the payoff statement at closing (it may have not reflected a prepayment penalty and most lenders will have a clause on the payoff statement stating they can make changes at any time and they are not bound to honor a statement). If anything, this will be a learning experience for the next transaction. Good luck,