BofA Loan Modification Declined

For the 3rd time, we were declined for BoA loan modification. They said we were not delinquent and had too much income, both of which are a complete lie. After a year and a half, we have to bail since they won't work with us and we are both senior citizens. If we walk away from the house, or sell short, in both cases we don't have the money to pay any shortage. If they get deficiency judgment, can they garnish social security or private pension. We have a cottage which we have rented out to try and help and need to know whether they could "take" that as well. We cannot sell our house in MI which was appraised at above $300,000 because there is a beautiful comparable down the street for $95,000 and it has been sitting unsold for a year. Nothing is selling here.