Does my lender owe me money?

[Jake Denning]

Hello BP, I purchased my first flip back on 7/31/19 and we closed it on 10/31/19. We used a hard money lender for the purchase and they sold the loan to another company shortly thereafter we purchased. I signed all of our closing docs on the morning of 10/31/19 and the buyers signed in the afternoon of 10/31/19, the buyer's lender did fund the title company on the afternoon of 10/31/19, however, our lender did not receive the payoff until 11/01/19 and our lender charged us the payment which was due on 11/01/19. The question is, should we get that payment back since we techniquely funded on 10/31/19 or does the lender keep the payment since they received their payoff on 11/01/19. I am interested to hear the community opinion on this or who has run into this before?

[Jeff S.]

This shouldn’t become a matter of opinion or open for discussion, @Jake Denning. Nor does it matter what anyone did technically. What matters is what your note says? Ours is clear.

We charge interest starting on the day we wire the money to the day we get paid back, inclusive. This is pretty standard. Assuming your note is similar, in your case, that would be 11/1/19.

Our demand letter always requests title call us to confirm the exact amount of our payoff and, more importantly, to verbally confirm our wire instructions. They don’t always do this. When properties record on a Friday and they don‘t call us, some title companies will wire 3 days extra, assuming we won’t receive the money until Monday. We almost always receive the money on Friday anyway and always refund the difference to our borrower.

In our experience, virtually no borrowers check their payoff amount, trusting the lender or title co., so good for you, Jake. Most everyone is honest, but anyone can make a mistake. With exception of when we were once shorted $132,000 (yikes!!!), almost every mistake title has ever made paying us back, has been in our favor. Of course we refund any overpayment, even if it’s for one day.

In your case, Jake, it looks like you were charged properly. Good for you for checking.