You may or may not be able to sue the bank: it depends on the terms under which you out the loan and whether or not your permission was required, under those terms, for this payment. If the bank violated the terms of the loan, you could sue based on breach of contract (the terms were part of or constituted a legal agreement).You could sue the contractor also, based on some or all of breach of contract (not doing what they agreed do to do), fraud (lying about what they could or would do), and/or professional negligence (doing work that does not rise to commercially or professionally acceptable standards).