You can always sue, but the real question is "is there any chance that you can win"? Exactly what "negligence" is the lender responsible for?
Did they disclose all of the fees involved? Was your income / debt ratio acceptable? Did they lie to you in any way?
Unless you can show that they mislead you in some way... I don't see any hope for winning... but then, I'm not a real estate attorney... and this would be a good question to ask of an attorney.... more
You can ask for anything you want. However, more than likely you may have attorney fees in addition to what you owe due. It is unlikely that the bank will accept anything but full reinstatement to bring the loan current. If you have a hardship and want to try to ask for a modification on your payment amount, the bank may consider that if you meet their standards. However, they will unlikely accept a short payoff if you want to payoff the loan.
First Weber Group
Certified Distressed Property Expert