any hope for a friend???

i have a friend who is looking for options on their home (outside of Irvine). 

They currently owe about $500K.  The house is worth about the same.  Current on the mortgage, but at a 6.75% rate.    Unfortunately, the loan is NOT owned by freddie or fannie, and thus does not qualify for any govt program.  The current holder (Flagstar) will not budge and is saying "tough" luck to any modification of the loan.    While there is some liquidity, there is not enought to pay the loan down to 80% ltv to do a traditional refi.  Also, Flagstar, (I did not verify) does not or indicated they will not participate in the FHA short refi program for underwater mortgagees.   

Does anyone know of anything else that this person could do with regards to their mortgage to refinance it to a lower rate?    Credit score is good (~800) and my personal thoughts is that it sucks that someone has excellent credit, pays all their payments on time, and is unable to refi. 

Thanks.

Loan mod is extremely difficult if your friend wants to keep his good credit. First he needs to demonstrate hardship. For most cases owners want to save money. He must default on 3 payments and no more or less. If he won't take this first step he will not stand a chance. The lender will work you friend for about a year and have different retards to handle his case. They will give him a run around or fax his papers over and over again.  He will need to repeat his life story to a new handler each time he calls. This tactic is to tire h out so he will give up.

Tell him to attend NACA when this non profit government sponsored organization comes to LA this year. NACA will assist him to avoidimg all the road blocks and possibly arrange a meeting with the banker. The problem I see is the lender is not the usual major banks and has less incentive in working with NACA.