Mortgage company sent funds back and foreclosed

[Manesh Hardeo]

Hello all,

I have a crazy situation and wanted to see if anyone else has dealt with this.  We bought a house and closing docs were signed off on the Friday prior to Labor Day.  The deal funded by noon on the Tuesday since Monday was the holiday and the funding department was backed up. 

The deal closed, funded, but apparently the mortgage company sent the funds back and said they foreclosed on it.  I've never dealt with this before in 14 years.  

What can we do?  Thanks in advance.

Manesh