short sale or loan mod?

[floridagirl23]

My Lender is US Bank and it is a Freddie Mac Loan. I was just told by my local housing agency that the bank may not allow me to do to a loan mod since I haven't made a payment in 12 months.

Do I need to really make a payment before they might work with me? I honestly don't have the money as I have had to use it. Anyways its just a really long story. I can't seem to get any good advice. Just the general info.

At this point, I am just trying to figure out if it is better just to do a short sale which was my plan but then with some of the guidelines changing I am kinda of holding on for some hope.

I have 2 homes and moved into my smaller one as I thought it was going to be foreclosed on. So my home has sat empty this last year. I am mostly definitely willing to move back in if there is a possibility of a mod but just don't know as I keep getting conflicting info and am waiting on another loan packet from US Bank.

Here's my info:
$2700-$3000 GROSS INCOME ON PAYSTUBS
RENTAL MTG-$770
HELOC ON RENTAL-$200 INTEREST ONLY BUT WILL NEED TO MOVE IT TO A FIXED SOON WHICH WILL PROBABLY BE ABOUT$600/MO
PRIMARY MTG (NO ESCROW)-1464.00 (HOME VALUE UNSURE AS I AM IN FL BUT I THINK ABOUT $140,000. I OWE $225,000.
CAR PYMT-438
UTILITIES-$300
CAR INSURANCE & GAS-200

If I move back into my primary then I can also get an extra $1100/mo in rental income.

do they calculate you modified payment on your total debt or just your mortgage debt?

I think if I could get my payment to around $700-$800 with tax and insurance included I would be ok.

Am I just wishing on a star here?

Also last question, if I end up doing the short sale my mother wants to purchase the home as I think she feels like this is her fault and is upset at all the money that has gone down the drain. can you short sale to family? will the lender be able to tell if she has a different last name?

Please don't judge-just answers & advice. Thanks.