Contact a Housing and Urban Development (HUD)-approved housing counseling agency. These agencies provide free (or low-cost) advice. They will tell you about government mortgage aid programs you can apply for and help you negotiate with your lender. Visit HUD's website (see Resources) for an up-to-date list of approved agencies in California.
Prepare for your conversation with your lender. Gather relevant paperwork such as your account information, income statements and an up-to-date budget for your household. Read and familiariaze yourself with the details of your mortgage. Prepare yourself to explain and prove why you need to renegotiate your mortgage. If you can afford your mortgage but you are looking for a better deal, be ready to quote the lower interest rates other lenders are offering.
Call your lender as soon as possible. Never ignore calls or letters from your lender. It is best to call your lender before you fall behind on your mortgage payments. Ask for your lender's loss mitigation department.
Provide the paperwork your lender asks for. If your lender agrees to renegotiate your mortgage, you will have to provide additional paperwork. This will include filling in and signing forms, as well as providing details about your financial condition.
Review the new mortgage terms carefully, preferably with your housing counselor. Confirm that the terms in the documentation your lender sends is what you agreed to over the phone. Sign them and send them back to your lender.
SOURCE : http://homeguides.sfgate.com/can-renegotiate-mortgage-2121.html