I am so sorry you are dealing with this, I know firsthand how crushing and frustrating closing problems are.
Our house was being sold by a Relo company, who decided to inform us the day before our closing that the previous owners had 3 mortgages on the house (exceeding our purchase price by $42,000), no other assets, and were on the brink of bankruptcy. At the time I was 8 months pregnant, we had already signed an agreement to sublet our condo, and were about to become homeless, just as DS was starting kindergarten! It was a nightmare!
Our lawyer threatened everyone involved with breach of contract and misrepresentation lawsuits, so the previous owners agreed to let us move in, while the banks & lawyers tried to sort the title out. We wound up "squatting" for over a year, and then finally bought the house from the bank once they Foreclosed. It was a PITA, but eventually we got our house.
Anyway, Alli is right - try to BREATHE! Everyone I know has had some sort of unwelcome surprise when buying a home.
Things will work out for you.
