We owe 415000 on the first which is serviced by Chase / backed by Fannie.

We owe 51,000 on the 2nd which is a HELOC that is serviced and backed by Chase.

The appraised value is 225,000.

The offer we are bringing to the table is for 240,000.

The first approved the sale on 6/30 with a required closing date of 7/30/2010. In the deal, 3,000 would go to the second lien. After that, the negotiator for the 2nd was impossible to get ahold of. (We tried, our realtor tried and the negotiator for the first tried.) He finally contacted us on 7/30 and said he was issuing approval but that he (Chase loan # 2)  would need a pay off in order to release the deficiency. He asked for 9,000. He said he would approve the sale either way but without the pay off, they would sell the loan to a third party who would try to collect from us after the short sale and at that point, our only recourse was bankruptcy. 

We asked him to issue approval and decided to pursue the sale, knowing we still had a month to try to negotiate that number down. The negotiator for the first graciously approved an extension that would allow us to close on 8/30. The 2nd issued approval but there was a clerical error on his document. Our realtor asked him to reissue so we could proceed and that was that last time we've heard from that negotiator. Its now August 20th and the negotiator for the 1st is saying she won't approve another extension and that she will close the file at the end of the month even though the only thing holding this up is the negotiator for the 2nd lien. If this happens, we will either go into foreclosure or will have to apply for a short sale again.

So I have two questions: 

- Is it just me or is it totally absurd that we would go into foreclosure because of a clerical error on the part of the bank? Is there any way to force the 1st to extend the closing date again while we hound the negotiator for the 2nd to do his job correctly? I have a woman in my local congressman's office who has been monitoring our file and she is working with the government contact at Chase. I also emailed the lady at Fannie Mae who is dealing with our first but I haven't heard back. Is there anything else I can do?

- Under the HAMP guidelines for which we qualify and Chase is participating, aren't the banks required to forgive all debt in the event of a short sale because they are taking money from the federal government?  Is  the negotiator for the 2nd taking advantage of us by asking for a pay off? aren't we protected anyway? 

Any help / insight advice would be greatly appreciated. 

thank you!

justine