Call an attorney is the proper thing to do. Genereally speaking if your loan is insured there will be 100% recovery and there is no motivation for any investor to negotiate plus they have full recourse rights against you as backup if there are "issues". I may additionally advise that the attroney you seek out have a bankrupcy division (Mostly for negotiation purposes but its also good insurance so that you are covered both ways).
This is really what I want to discuss with the world if anyone is paying attention. This, right here, is what is wrong with the real estate insdustry right now. TARP/CDO-CMO Mess and insolvent banks that are propped up by the federal government in the name of preventing greater economic collapse is preventing good honest people from salvaging their homes and finances. It is creating injustices so hedge funds and a banks managing a corrupt system can salvage itself.
I am going to make a political statement here but anyone who goes and votes for an incumbent politician that has been in office for more than 2 years (republicans included) is just perpetuating the problem. the solution is turn these banks over to receivers (bankruptcy - so that all contract rights are settled for pennies on the dollar) starting with B of A or Citigroup and renegotiate every loan originated since 1990.
This is truly an unfortunate situation, good luck.
I would suggest that you first speak with a Tax Advisor about your plans and then a Real Estate Lawyer to help make them happen.
On 4/20/10 I attended a presentation on the legal ramifications of short sales/foreclosures. The two speakers are listed below:
Bryce Despain, Despain Tax Services, http://www.despaintax.com
Robert Jacobs, Attorney at Law, http://www.rbjlaw.com
You might want to try calling the Department of Real Estate legal hotline and see if they can assist you....
its free ...if they can't help, they may be able to refer you to someone who can. The number is 213-739-8282.
I'm sorry you are in such a sticky situation..good luck with everything.
Please feel free to call or email me if I can be of further assistance.