Mr. Bodonyi,

Just to add a couple of thoughts to Robert's post, of which I am in agreement.

I have no doubt that you have considered the effects on your relationship with your lender client in determining how you handle this problem.  It occurs to me, though, that Mr. Martinez's E&O provider may not simply pony up the money without a fight.

If your client had knowledge of the omitted lien through the credit report or application, is there not a possibility of a court battle --between the lender and Mr. Martinez's E&O provider -- that could result in the loss of your customer? 

I am not a lawyer and I would not pretend to be able to predict how any suit would be decided.  If it were me in your situation, I would consider whether or not my relationship with the lender was worth salvaging.