Refinancing after loan modification - hitting a brick wall!!!

[stargate823]

I'll cut to the chase here and give the cold hard details - it will be therapeutic for me as I'm still steaming from the conversation I just had with CitiMortgage... I'm a first time poster and a long time lurker...

 

I have two mortgages on my property. My primary mortgage is through PHH and has myself, my mother and father on the account. The loan is current and in good standing - though at 6.25%.

 

My second mortgage with CitiMortgage is my issue. My ex wife and I took this loan out in 2006. She left me before the first payment was due, and I struggled through the years to make ends meet. We filed our divorce ourselves and never included the house in the divorce documents. That required a bunch of hassle after she filed bankruptcy against the loan in 2009. After it was discharged (they couldn't come after the house because the value had tanked with the rest of the market) I subsequently had to file a motion to have my divorce decree modified to award me the house - even though she had already signed a quit claim deed, just to satisfy CitiMortgage's ridiculous and redundant requirements to modify the mortgage.

 

After a long and extremely stressful 8 months last year, CitiMortgage modified my loan, forgiving 40K worth of principle which significantly dropped my payment. My interest rate is still 11.50% on the roughly 29K balance.

 

So here in lies my problem. My credit reports now have a comment line stating that this mortgage has been modified under a government program. I am told by multiple underwriters that I cannot refinance my primary, secondary, or primary and secondary together because of this (it forces them to use short sale guidelines and I cannot do an FHA streamline). I have been told that the fix could be as simple as asking CitiMortgage to remove the comment line from my credit reports. I've three times requested this and been denied each time. I am told again and again that they are legally obligated to report the comment - even though I know they can report and not report whatever they damn well please. The latest representative suggested I file yet another dispute and provide supporting documentation from an attorney that they are not required to report it.

 

I apologize if any of this is unclear as I am still shaking with anger over this situation. I hope that someone out there has had a similar problem and can offer some sort of advise - I know that I can't be the only one with this type of an issue out there. I appreciate any and all feedback I can get! There must be some way that I can refinance in good faith both of these mortgages together at a lower interest rate! What can I do?

Edited May 22, 2013 by stargate823