I'm sorry about your situation. The good news is that you have your health, the sad news is that you may be relocated. With all the fuss and media it's tough to find out the best path to pursue due to confusion and uncertainty. I agree with Terry and weigh your options first. If you do speak to a lawyer, make sure that they don't charge you for consultation. If they do, RUN! and find another attorney. There should be some good lawyers that offer free consultation for disbility suits. Take your time but it's probably not a first or second option for your situation. If I were you, I'd talk to a local realtor that specializes in short sales (someone who has closed at least 12 per year and ask for testimonials. I get them often on my short sales and the sellers are grateful for the service.) For a list of questions to ask, please reply. Otherwise, weigh your options on loan mods vs. short sales i.e., HAMP vs. HAFA. If you have no equity in your home and are unemployed, you will not qualify for HAMP, sorry. A job or some sort of income is required. Which leaves you with short sale vs. HAFA. Ask your Realtor the difference between the two. Should you decide to not take action and stay in your home and let it go to foreclosure, keep in mind that the lender cannot evict you for 90 days after the trustee sale no matter the notice. Even if the home was sold to a 3rd party investor, they cannot evict you for 90 days so there will be no need to retain a lawyer. Obama signed a bill for homeowners who've lost their home to foreclosure. Want more info, please reply. Best, Drew Foma'i @ First Team Estates - Newport Beach, CA.
Have you talked to your current mortgage servicer? If so, what did they tell you?
If you have not attempted this, then contact them and see if they can provide some sort of assistance to you.
As for programs, there are housing assistance programs out there - I just don't know which ones you would qualify for. Try your current servicer and let me know what they say.