Lender Demands Payoff 3 Weeks After Closing

[LaToya Morris]

Hello everyone,

A client closed on a cash-out refi on 12/26/23 and we received the final settlement statement that morning. The lender's payoff amount was good through 12/31/23. He used a hard money loan for partial purchase price and rehab. The funds for the repairs were provided in the form of reimbursement. The last rehab reimbursement wire from the lender was sent to him on 12/21/23. Naturally, we reviewed the settlement statement before and at closing and everything seemed to be in order. Today he received a demand payoff letter from the lender saying there's a balance due for the amount of the last rehab reimbursement to release the lien on the property. Apparently the lender did not calculate that amount in the settlement statement even though it was wired to my client a week before closing. 

In the 15 years I've been investing myself and working with investor clients I've never experienced this situation. Can the lender come back 3 weeks after closing and demand more money than they asked for on the settlement statement? 

I thank you in advance for your input.