My question for you is about forming an LLC and transfering title of a property into that LLC.

The lawsuit includes claims for breach of contract, specific performance, and trespass to try title, and the case is registered in public records.Additionally, the lender has initiated foreclosure proceedings on the property due to Seller Z's default on payments.Is there any action I should take as Buyer A?

What I suspect is that you "inherited it" but that when you transferred title into your name the deed showed $1 because that is allowed for close family transfers and avoids state transfer tax aka tax stamps on the sale.

As I understand it, the lien gets wiped from title but HUD gets paid first due to the mortgage insurance.

I need so much help figuring the business side out, then how do I transfer the title into the LLC of course.

Could she not co-sign the mortgage with you and both of you go on title?

Personally I've kept my properties out of LLC's and just used the separate business account and an umbrella insurance policy.Most people says there's little chance that transferring the title to the LLC will cause the note to be called, but there's always a chance. 

It's difficult - often impossible - to verify their identity, address history, ability to pay debts, or criminal history without a social security number.

You could have two identical apartments, side by side, and one could be worth much more than the other because it is producing more income.

I found 9 different llcs all titled to the same person with address to suits that are being rented by social workers all the way to a staples in California.