What can I do if I am unable to get a new mortgage?

Your home went into foreclosure in August 2012. Did the bank withdraw that foreclosure? Then the bank commenced judicial foreclosure in September 2013. What is the status of the case? Your deed of trust most likely states that once the loan is in foreclosure, the lender does not have to accept payments. It is not clear how the bank could have increased your mortgage payment. The lender cannot just unilaterally increase your mortgage payment. There must be something in the promissory note or deed of trust that allowed this. You really need to talk to an attorney about this because there is no way anyone can figure out what happened without seeing your loan documents and getting a more complete statement of the facts. Your local county bar association can arrange a short consultation with a real estate specialist for a nominal fee. It would be money well spent to get your questions answered correctly. It is also not clear what you mean by the lender "blocking you from changing your lender." Your current lender cannot prevent you from refinancing with another lender. Perhaps you mean that the lenders you have contacted for refinancing are rejecting you because your current loan is in foreclosure. I'm afraid that the foreclosure has substantially damaged your formerly excellent credit score.

You do not state why the bank told you in August 2012 that they were going to foreclose. I am assuming it was because you were behind in your payments. If this is the case, your credit score has been seriously harmed due to the late payments and/or delinquency. It is your credit score along with the stricter underwriting guidelines for mortgages that is causing you not to get a new mortgage.