"loan modification paid up front."
You have a bunch of "moving parts" going on here. I have to agree the prudent step is to obtain your own legal representation to review your case. Based on your allegation that you recently paid an advance fee for a Loan Modification an illegal act has taken place.
As of Oct 11, 2009 (via CA Senate Bill 94 -Calderon) it has been ILLEGAL for ANY person (including lawyers, real estate brokers, real estate salespersons, corporations, companies, partnerships, or any other licensed or unlicensed person or party) to request/take any monetary consideration up-front for loan modification work/services, or mortgage loan forbearance.
Below is an 8-page DRE Fraud Alert regarding Loan Modifications suggesting you report your alleged advance fee violation to the California Attorney General and California Department of Real Estate. In addition, if a lawyer; company or entity claiming to be attorney-backed/attorney-affiliated is involved, it goes on to suggest you also report any alleged violations to the California State Bar.
1.) "loan mod paid up front" sounds like one of those scams where you pay them $1500 to save your home; If a Licensed Real Estate Broker was involved, it may be grounds for losing license.
2.) "Shortsale kept in closed circles"; don't understand; either it was LISTED, or it wasn't.
3.) "minimum price" on a Shortsale is between the Bank and the Buyer, no effect on Seller.
4.) "hold off filing bankruptcy", this would be probable to allow the Shortsale to go thru.
5.) "2nd mortgage holder" should have be taken care of; in California, there is no Deficiency Judgement, if the Shortsale went through, the 2nd was satisfid, one way or another.
If these answers do not suffice; then there is more going on here, and more info is needed.
Good luck and may God bless