Generally speaking, the fact that a home is sold subject to a lien (which is what it sounds like happened in your case — HUD had a lien based on the loan it had provided), does not absolve the original debtor (your husband) from his personal liability for the debt, nor does it make the current owner personally liable. If the new owner sold the home, the new owner would likely be required to pay HUD from the sale proceeds in order to remove the lien so the home can be sold with a clear title. HUD has no ability to pursue the new owner through garnishment, intercepting tax refunds, etc., because the new owner is not personally liable for the debt; this fact is likely what the collection agency means when they state that HUD has no “contract” with the new owner. Your husband, on the other hand, is almost certainly still personally liable for the obligation, so HUD has the right to garnish his wages, intercept tax refunds, levy his bank accounts, etc. Learn more about HUD and FHA loans at Bills.com.
To prevent further collection activity against your husband, you may want to contact the collection agency which is handling the account to try to work out amicable repayment terms. I encourage you to review your budget carefully, determine what you can afford to pay each month, and make an offer to set up a payment plan. If the loan servicer is willing to agree to an extended loan repayment plan, I would encourage you to ask for a written agreement outlining the balance, interest rate, payment amounts and due dates, and stating that as long as payments are made as required, that the creditor will take no further action to try to enforce the outstanding debt.
Again, I strongly encourage you and your husband to consult with an attorney in your area to explain your situation, to confirm whether or not your husband is still liable for the debt, and to help you find the best solution to assist you in resolving the account. I wish you the best of luck in finding a workable solution to this debt, and hope that the information I have provided helps you Find. Learn. Save.