First....as another answer mentioned, lenders can work with you for the Hope to Homeowners FHA loan mod. You can do this with your current lender or a new one. In order for the lender to have government backing of these new loans, they have to reduce the balance to the current market value. You agree to equity sharing as part of this too. So in the first year, if you have to sell the home, you get 0% of the equity. It increases by 10% each year until year 5 when the government gets 50% and they continue to get that 50% equity for the life of the loan.
Other loan mods are better for you depending on your situation. There were some really bad loans out there and most lenders realize it. You can really do this yourself. But it's uncomfortable, and so if you want to pay someone to handle it, you can. My understanding in California is that the only loan mod companies who can collect a fee up front are attorneys. If you do use one of them, I would make sure they offer a refund/partial refund if they can't help you. If your other option is bankrupcy, you might find one who does both, it will save you money in the end.
If you have a job and steady income, and would normally be considered a good risk, then the lender will want to work with you. I've seen many different types of work outs. If the first and second is with the same lender, I've seen them wipe out the second. I've seen 40 fixed at 4%, I've seen 5-year interest only loans then adjusting to 5.2%. There are lots of options. What I've recommended to my clients, there are attorneys out there who offer a free evaluation of your situation. I have a couple I like....call them and talk about your specific situation, they will go over your credit, income, loan, other credit obligations etc...then they will give you an idea of what they think they can get from the lender you have. This will give you an idea what to ask the lender if you want to go it alone, or....you can always pay them to do it.
I hope this helps! I have buyers who I helped buy in the past few years that are now in over their heads....I'm trying to stay on top of this to help. As a Realtor, I only get good will out of this, but that's OK with me. If you'd like to talk, feel free to call/email me directly and I'd be happy to give you some direction.