Thanks for sharing your story. Looks like you are one of the many that has gotten stuck in the proverbial hamster in the wheel in trying to get a
loan modification. As you already know you're not alone and this is nothing new.
There are no public guidelines as to what can be done during a loan modification. But what needs remembered is that this is loss mitigation for the lender and not for the borrower. So, when they look at a sitution and size it up, They determine what is my loss going to be if I don't work with this borrower and offer them a loan modification. You made a key statement about your equity. In their eyes they would get their money faster and all of it iof you just sell or they let it go to foreclosure and then unload it at auction.
I have heard some good things and have had some personal good experiences with Litton Loan and also terrible ones. Some forum members here have been contacting the CEO's and CFO's of the companies to get an answer or help.
This forum is for people who want to save their home and not sell, so there will be none of that around here.
Have you tried a non-profit or legal aid lawyer in your area to assist you?