Refinance or Loan Mod

I am paying a 10.99% interest on my home mortgage. I lost my job the beginning of 2009, my daughter had major medical problems, my out of pocket was approximately $29,000. I do have a job now but am making 1/2 what I usually make.

My net take home pay is $2.200 per month and my home loan is 811, and I make my taxes and insurance payment separately.

My note has been sold twice since Oct 2009, I am current on my note but am not sure how much longer I will be current.

My mortgage company told me I needed to cut my other expenses, i.e. I was told I should not spend $400 per month on auto gas, I drive over 100 miles per day to and from work. I was also told I need to cut my auto insurance, I have 2 teenage drivers.

If I cut off my electricity and don't go to work, sell my vehicle then I might be ok.

My mortgage company also explained they are helping me because I am paying 10.99% interest and my interest hasn't been raised in well over a year.

Today the 30 Year ARM's are 5.5%, what a deal.

What am I supposed to do, I will either lose my home soon fall extremely behind in my payments which may lead to losing my home anyway????