How can closing funds on a home sale be only partially allocated?

My friend (the seller) sold their house and held closing on Thursday. The seller owed 70,000 to the bank and the remaining funds to be disbursed to the seller were 30,000. The 30,000 was wired to the seller’s bank and are available but the 70,000 loan is still showing up as unpaid and the same bank, a credit union deposited the 30,000 in the seller’s personal checking but says they have received no such funds for the mortgage payoff. The earliest it now could occur is Monday. Is there a way that the seller could lose the house and still be required to pay the mortgage? Who should be responsible for paying the interest and insurance for these extra days if it does complete the payoff? Imagine how the seller feels that they have to still insure a house and have a mortgage on a property when there is someone else that took possession. The law that would seem to apply is the Tennessee Good Funds law with the caveat that the buyer allegedly paid cash to the escrow agent (He used IRA funds). Thank you in advance for your answer. Kudos to all lawyers who make stuff like this be avoided and clean up others messes when things go wrong.

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