Sounds like you went to Beneficial during a time of crisis. That bank does loans for people who don't qualify for conventional lending: low credit scores, inability to prove income, home value too low to pull equity out etc. I'm sure that when you signed the paperwork back in 2007, you understood that you were going to getting an 11% rate loan, right? It's not immoral to pay such a rate when no one else will lend you money because of a bad circumstance. I guess the alternative would have been not to get the loan in the first place.
You need to wait until the value comes back up again and then refinance. ABC News last night stated that home values are on the rise again. If you decide to modify your loan by contacting Beneficial yourself, do NOT go late on your payments, regardless of what the company tells you. You don't have to be late in order to qualify for a modification. Most likely, Beneficial will not modify your loan because they only deal with high interest rate, risky loans.
Do NOT short sale the property unless you want to rent for 3 more years or go through my resource for financing at 10% after putting 30% down.
Do NOT walk away for the same reason.
If you can, however, find a renter who is struggling with credit issues and rent the place and then go find yourself a place to rent for about a year. Then in 2014, use the rental income to offset about 75% of the payment to help you qualify for another property. If you decide to get creative, look at buying a multi-family unit. FHA will allow you to use the rent from the other units to help you better income qualify (even if the units are not rented at the time that you buy).
I can help you buy some rental properties to help increase your income flow so that you can pay the loan off faster or pay it down so that you can refinance into FHA or Fannie/Freddie and be done with it. I have the ability to help you buy with no money down, regardless of credit issues. It's not easy (for the Realtor) but it's possible. Imagine rent rolling $2000 extra a month!