If I understand correct a bank can't refi a home loan under 18 months unless benificial to lender, raise the interest if it goes into default or put a balloon payment if matures in less than 10 years. My bank made me agree to change my 20 yr heloc to a 1 yr with a balloon and guarentee it with my business or refused to refi my commercial line of credit which ballooned. The next year they refused to refi either unless I agreed a mtg error was made, belonged on a property I was selling, pay it and give them my remaining sale funds to pay down the heloc. Now both ballooned again, they wont refi unless I agree to give up foreclosure defenses and waive their liability. I refused so wont refi, raised all interst rates and called another loan in, filing foreclosure on everything.
It sounds like you have a very complicated problem with your lender. I would recommend speaking with an experienced attorney in person to go through all of the facts and documents. Many times we hear that the bank officers say one thing, but the paperwork doesn't reflect the same statement or says something entirely different. You certainly have some issues that need to be resolved with your lender before they file for foreclosure and complicate the problem further.
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