This is an article as well as an ad for a law firm as well as I can tell but it's got some good advice, again these articles are here for you to read and for research purposes and I always think it's a good idea to do research on your own as well smile.

Applying for a loan modification does NOT mean you can ignore your lawsuit!

Every day, throughout Florida, banks commit fraud against unsuspecting homeowners

If you’ve been sued for foreclosure, and the bank is telling you not to worry about the lawsuit, DON’T BELIEVE IT.  It’s not true.  At worst, it’s a lie, and at best, it’s a low-level employee of the bank who is woefully uninformed.  Either way, it’s not true.  If you’ve been sued for foreclosure, and were served with a Summons and Complaint, you have 20 days after service in which to file a written response to the Complaint.  Nothing the bank tells you on the phone changes that.  The fact that you’re in negotiations with the bank for a loan modification doesn’t change that, either.  If you’ve been sued, you must respond to the lawsuit or you risk losing your home to foreclosure (long before any decision about a loan modification).

http://www.stayinmyhome.com/blog/?p=111