Bank of America isn't helping with Loan Modification

Started out with Countrywide Mortgage. Worked with them on a loan modification plan. Didn't hear from them in 3 months, then received a letter from Bank of America stating we were to start paying them. Countrywide's loan modification plan was shot out the window because they said we hadn't submitted our paperwork when in fact, I did. This was confirmed from their representative that they did in fact receive it. Bank of America started foreclosure proceedings due to payments not up to date (we were working on a restructure plan with Countrywide). BOA will not allow us to make any payments, but in fact they are reporting us late each month on our credit until this is over. Is this legal? Said we did not qualify for the President's loan modification plan. Submitted all paperwork they requested four months ago to see if they could help us. They now are stating because it's been over 90 days since we submitted our paperwork, we now have to resubmit more pay statements, bank statements and last years tax papers as well. Request assistance in dealing with this situation, or is it possible we could just sell our house? Last year we took in 2 daughters that were out of work, supported them in all aspects, took a 20% loss of pay for 6 months in order to keep my job. Am doing better now.