Title company and closing Attorney overlook HUD payment at close

[Nancy Casse]

Here's a doosie...

September 2015 my friend sold her home (her first and only experience in selling property). Her closing attorney and the Title company showed a title commitment letter which included her HUD mod balloon payment of $70,000 in 30 years. The title agency gave her a clear note and once closed never paid the HUD note, instead the $70,000 was part of her profits. My friend confirmed with her attorney if that was correct and her attorney confirmed that it was. My friend thought it was a pardon of debt and walked off with her $99k of "profit." A year and a half later, she received a demand from HUD for the $70k. She had paid off all her debts and going thru a divorce. She didn't have the $ anymore. She had to hire an attorney, make payment arrangements with HUD to garnish her wages $150/paycheck to settle with them. Meanwhile, her credit is ruined, no $ and garnished paycheck. Her attorney has now served the Title company (E & O) and her closing attorney for damages. I am afraid she is getting herself into more debt with no chance of getting any compensation.

Does anyone have any experience in this matter?  Is she entitled to damages?