FLORIDA,  FHA loan 30 yr fixed 6.0%  I have been waiting on the modification process for 10-11 months. My father who was a co-signer Filed Bankruptcy because he lost his job. He also put my house in it, so he could get his name off.  I had a loss in income. I applied for a modificatiom. The bank said i qual'd. But I'm still waiting. Everything was put on hold because of my dad's Bankruptcy. Now complete. I let the bank know i am receiving a VA disability payment now. Which brings in more income. MY house is  3/2  loan 146,000 and my tax rolls came in at 70,000. Monthly payments of 1,091 With escrow. Decreased from 1,300 last year because of tax reduction. Due to value drop.

  We are a family of 7 now and need more room. My wife wants to leave the house and Rent a 4/3 for 900.00 a month. My monthly income is 3,500.minus car and insurance of 650.00 plus elec. of 250.00 and other bills expenses. I'm a confused hard working law enforcement and military veteran Dad. PLease HELP! :)  also:  My house needs remodeling due to flooding and i have not reported it to my insurance company yet. There may be mold. I have no flooring because of the flooding due to left on sink that got clogged while were were at a funeral out of state for a week.

If I'm able to start making my mortgage payments again, should I? Or continue waiting on the modification Process? Should I consider Bankruptcy or forclosure? Should i move to a rental? What's the best i can do with this situation?  

Thank you!