It's hard in this situation, the bank will not modify your loan because you don't have a job. The only other option is short sale. Consult with your CPA for any tax implications. You need to list your house with an experienced short sale agent to sell your house, at least you can try to avoid from foreclosure..
Certified Short Sale Specialist
Absolutely, you should try to sell your present home as (previously suggested) a short sale. If you cannot make payments on your mortgage, you will be assigned a Notice of Default. Although it will not absolve you from taxes, perhaps the lender will be cooperative enough to see you through this situation.
The most important factor at this stage is to begin the process; you're on the right track to ask questions and make sound decisions.
The US economy coupled with California's unique situation is certainly not helping the real estate market, but there is light at the end of the tunnel.