Patricia....I recomend you do the following:
- find out why your loan modification was declined, maybe you can provide additional information and have the decision reconsidered.
- reapply for a loan modification, the banks process is changing all the time, so it's worth trying again.
- meet with a local agent and list your home for sale as a short sale, your credit will suffer less impact if you can sell it this way vs. going to foreclosure.
- call your 401k administrator to find out how your plan allows you to withdraw to purchase a primary residence.
Let me know if you need help with any of the above steps.