Partial Claim on FHA Loan shows unpaid

[Sarah Rodgers]

I sold an FHA backed Condo in December 2020. I did do a loan modification in early 2020. Closing went well - all monies were accounted for in the HUD settlement statement including the $2800 owed for the loan modification.

Purchased a new home in 2021 - another FHA Loan.

The buyer of my Condo in December 2020 is now in the process of selling the condo and has found that there's still a partial claim from HUD for the $2800. I never received a Deed of Release from HUD but did receive one from my mortgage company. The Title Company for the new seller/buyer is now contacting me to get this cleared up. I don't understand where the $2800 went that was collected at closing. Did they not sent it to HUD. Is it common for mortgage companies to not pay off these loan modifications. I'm a bit baffled how this happened. It was all VERY straightforward at the time.

If I never responded to the title company when they contacted me last week - what would happen? Would the new Seller not be able to close?