Awful News! What do I do now?

FedEx rolls up at my house this morning with an envelope. It's from my mortgage company. We've been going through a "trial loan modification" for 8 months now. Their letter says that we have been denied for a loan modification. We are behind 9 months on the mortgage, totaling over $7,000.

So what do I do now? I am having a baby in 13 weeks or less! What are we supposed to do? I called the bank and the girl on the phone tells me for our area, a typical family of 4 spends $300 a month on groceries. I know I spend $500-600 per month. I never buy anything unnecessary at the grocery store. I buy diapers, toilet paper, shampoo, lunch for my son, etc. We never eat things like steak or any kind of meat that costs more than $4. I told the lady I don't know where she got her figures but those people who only spend $300/month are eating WIC corn flakes for breakfast lunch and dinner. She told me to go to a food bank for old produce donated by grocery stores.

This is ridiculous! They let me go through 8 months of limbo, paying their "trial payment" just to tell me to get out now. I'm at a loss for what to do. How can I bring another baby into this life? I pray that God will provide a way for us to provide for our children!