Lender cancelled,yet still paid off my current mortgage and debts.

[So Overwhelmed]

California - My husband and I are desperate for help. Nine months ago we applied for a refinance and on the day escrow was scheduled to close we received a call from the broker telling us that the lender cancelled our loan at the last minute becuase of a $200.00 lien they found on our property from the Unemployment Department for an over payment. There was no other explanation given nor anything in writting, only this one single message from our broker. We were how ever told by the Title company that the lender told them the loan was being cancelled and no checks had been generated or dispursed for any of our payoffs. Because of the six week refi. process we went threw with this lender we found that we were now two months behind on our first and secound mortgages. A week later we received a welcome letter and first mortgage coupon from the lender who cancelled on us. We phoned the lender right away and was told these were sent out to us by mistake and confirmed the loan had been cancelled. We called our curent lender to try and explain why we were late on our mortgage payment and learned that our loan had been paid off a week earlier by the cancelled lender. We quickly learned that all of our other debts had also been paid off too. We could not get anyone from the lenders office to provide explanation for this. It took nearly two months as my husband and I scrambled to secure a new loan when the lender who cancelled on us put stop payment on all the checks they sent out. At this point we were now four months late on all mortgages and debts and incrring thousands of dollars in intrest, cancelled check fees, late fees and attorneys fees. We were foreced to take a horrible loan that we cant afford and are now again in default. We have the cancelled lender appearing as our first note on title and they are causing severe damage to both our credit reports appearing that we have an extra debt of $365,000.00. We have been asking them to provide us with a notice of recision or cancellation and to take themselves off our title and credit reports for nine months now. Our messed up title report has now put a 4 week delay on our ability to sell our property and the damage to our credit report will not allow us to refinance. We are weeks away from loseing everything and are so frustrated and scared. This is our first home and just had a baby with plans to raise him here. We need an attorneys help on contingence and any advise anyone can provide. Thank you.