American Home Mortgage Servicing Inc AHMSI, Option One Mortgage AHMSI working to take away American's homes Internet

In 2008 we (my wife and I) attempted a loan modification because our interest rate is 8.50 (?).  We sent documentation numerous times which they said they never received.  Of course we had to send new band statements, paycheck stubs, etc because the original ones were out of date.  We finally abandoned this process.  For some reason our mortgage was set up without an escrow and we were paying the taxes, etc.  We were having trouble paying the taxes so AHMSI took it upon themselves to pay the taxes and give us a negative escrow.  We finally paid that off a few months ago by paying an extra $550.00 per month making our payment $1371.59.
AHMSI requires us to have $250,000 flood insurance even though the house appraises for about $128,000.
The flood insurance is approximately $1700 per year.  I have to drive a 100 mile round trip to work (about $500 per month in gasoline), we have a child in college which we have to pay the balance after financial aid.  The house needs major repairs before we could even refinance with another company, but we just don't have the money primarily because of this mortgage.  We were recently advised of the HAMP and went through the process of sending in documentation , etc with the same run around of  they didnt receive this document or that document,  just to be told we don't qualify because of the percentage.  Had they told us our payment had to be at least 31% of our gross income, it would have saved us the time and effort to send in the documentation.  They had said we might qualify for a non-HAMP modification, but now they are saying probably not since we are not behind on the payment.  We could probably make the payment, pay for flood insurance, make repairs on the house if we had a decent interest rate. We were not able to pay for the flood insurance so AHMSI put lender insurance on our escrow in the amount of $3409.58.  We do realize FEMA sets the flood planes, but really, we are in West Texas in the worst drought in 100 years and no relief in sight.  The previous owner said that even when it did flood decades ago, that the water never even came up to the house.  My wife is disabled and really not in a position to just move to another location.  We were not able to pay the flood insurance so AHMSI put lender insurance on our escrow in the amount of $3409.58. When we had cleared the previous negative escrow, we called  to see if our payment could be lowered and we were told that they would not do another analysis until March 2012.  Today we received an escrow analysis showing they want an additional $400.00 making a new payment of $1737.45. We are not paying the December 2011 payment and using that money to pay for Flood Insurance through National Lloyd, so that AHMSI will remove their asinine flood insurance and requesting a forbearance on the Dec 2011 payment. We advised them of this today on the phone and we will be sending it in writing as well.  We are aware you have filed suit against AHMSI for these practices and that there are many, many complaint. Your assistance is appreciated.  We will send documentation though the mail