Refinancing with Bad credit

i have friends who own houses, and their mortgage companies sent them letters to refinance their homes to better rate. they have bad credit too, and wanted to quit paying for their house. one mortgage company already lowered the rate for my friend to 3.25%. he is saving $1500 as a result. all the mortgage company did was sent him paperwork to sign. there was absolutely no hassle. they didnt ask to pull his credit, or provide his income, taxes....etc

i have $170,000 loan on my home. my house is worth only $120,000 right now. i defaulted on the payments at one time last year, and they refinanced my loan by putting all the months which i didnt pay for the house back into the loan. as a result my loan became bigger. should i contact my mortgage company to see if they can lower my rate since other mortgage companies are already doing that for their customers? my credit is in the toilet, but so is theirs. certain banks are afraid that their customers will default, so they lower the percent for them by only having them sign for.

let me know what you think, and should i take action.