Was I wrong to treat a friend like this?

I could see both sides of the story. She was wrong for saying that ESPECIALLY in front of your son, and she took it too far with the joke. At the same time shes kind of trying to make herself feel better by putting herself above you, b/c shes obviously going through something with the foreclosed house and repossessed cars, and that her husband is out of state all the time. You should just sit her down and talk to her about her boundaries and and talk to her about what she may be going through.