Foreclosure/Forebearance/Modification

[SuzieQ]

I will try to make my story short. Lender is Lasalle Bank National Association, as trustee for Ownit Mortgage Loan Trust, Asset-Backed Certificates. Of course, Litton Loan is our servicer.Bought our home 2/06 and entered into a forebearance agreement 6/07 with $2052 down, payments of $923 for 13 months beginning 7/07. After we signed the forebearance agreement, we received a letter from Litton offering us a Loan Modification with $1925 down at a lesser interest rate. Since we just had paid the down for the forebearance, there was no way to come up with another down payment. I called Litton and was told that I could request that the first down be applied to the down payment for the loan modification, BUT there was no guarantee that we would qualify for the modification AND the foreclosure would restart where it left off. At that point it seemed to be better to keep with the forebearance plan and not try to go for the modification. We have a 30 yr fixed rate--no adjustable. I lost my job Aug.1st but unemployment started before the next payment. All payments were made on time until my unemployment ran out in Feb. and with only one income now as well as the high cost of winter heating, groceries, and gasoline, we're in the same boat as alot of others. My husband is the only one on the loan and the only one working now, but my income was a big help with monthly expenses.In January 08, we received a letter from the attorney who was handling the foreclosure for LaSalle/Litton. It was a Dismissal of the foreclosure, without prejudice that was presented to our county court of common pleas. On Friday 5/16 I received a notice of dismissal from the county court regarding property taxes (they had since been paid) as the county treasurer was also a part of the foreclosure.About 2 wks ago, I called Litton to request a Loan Modification and was told that the foreclosure was still on "hold". If the attorney for LaSalle sent the dismissal to the court already, won't they have to initiate a foreclosure from the beginning? In any case, the person I spoke to in the foreclosure dept. said that we were good candidates for a loan mod. He sent me the financial disclosure that I need to fill out and fax back with the requested documents. I am working on this and will have it finished and faxed back to them this week.At this point, I need to know what I should do next. We are having a hard time making the forebearance payment of $923 so last month I sent the regular payment plus late fee only. My online statement for Litton shows that the payment was applied to our account but, of course, we are still behind in our mortgage 3 months. A lower interest rate with the modification would be great, however, my first concern is to just get current with the mortgage even at the usual interest rate/payment.I don't want to rock the boat either, but should I QWR them so I can see where the $2052 downpayment for the forebearance went? We want to keep our home.Thanks for any help you can give.