Can I sue my mortgage company for a Permanent Modification?

We believe our loss mitigation request for the HAMP Permanent Modification has been wrongly denied. We have been trying to modify with GMAC on our mortgage since 2/2009. We have submitted the required paperwork multiple times with no success. However, recently we underwent a trial modification and were approved for the permanent modification on 7/1/2010. I have every phone call documented since 2/2010. We received a letter in the mail three weeks ago stating that we were denied the permanent modification because the HAMP papers were never signed and returned to them by the deadline. WE NEVER received the paperwork to sign, notarize and send back. I stated that on several phone calls made to GMAC asking when we were going to receive the paperwork. Per their demand, we sent the 1st Permanent payment of $ 1161.15 for the August 1st due date, but it has not been applied to our account since the “permanent modification” was denied and they do not accept partial payments. And last week, we received a FedEx requesting our decision on a short-sale or deed in lieu of Foreclosure. We would like to know if there is anything we can do to make GMAC give us that permanent modification they offered without having to submit new paperwork and go through another trial modification or heaven forbid go through a foreclosure, considering the paperwork was never sent out for us to sign and therefore this denial was in no way a result of our actions. We did EVERYTHING they requested (some multiple times). Why should we be penalized for their mistakes? I had one supervisor state on 8/10 during our phone conversation state that nothing was ever mailed out to us and that this was something that GMAC let fall. Then on two other separate dates, another supervisor and a representative also confirmed that no Permanent Modification Papers were ever generated. The latter was stated while on a 3-way call with a HAMP Escalations Counselor. As consumers, we get the sense that GMAC is buying their time with errors and lost/unsent paperwork until the program expires, they can foreclose or I find employment. However, considering I have had no success in over 16 months in finding a job, our only hope is to get the modification that HAMP promises to offer. We have done absolutely EVERYTHING that GMAC has asked. Considering my last update consisted of GMAC demanding payment and advising us to resubmit a new package; our only hope is that someone with higher authority or legal experience will see fit to take the time to help a severely struggling family and help put a stop to the never ending cycle of abuse from GMAC Mortgage. Therefore, we would like to know if it is reasonable or possible to sue our Mortgage Company for the Permanent Modification terms that were verbally disclosed to us in July?

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