I think I have been a victim of mortgage scam. - What to do

Go for loan modification. That's the only option you have. By the way you can definitely refinance. Have a talk with your lender.

There is yet another option, and that is refinancing. You can take out a new loan from a different lender at a low interest and replace this one.

Considering the refinance option will be better.

Yes, refinance your existing mortgage will be the best option for you.

This is why you should compare rates before taking out a loan. Anyway, talk to your lender first and then go for modification or refinancing whichever is suitable.

I have total about 15,000 in 4 credit cards. I think I can manage to save about $1200 to repay debts.

Okay. You have 2 problems. Your first problem is that you woe $15000 on 4 credit cards. Your second problem is that you're paying high interests on mortgage.

Solution: Do you have equity in your home? If so, then you can use cash-out refinancing to pay off your mortgage and credit cards. But in this case, check the interest on your new mortgage. The interest should be lower than your present mortgage.

In a cash-out refinancing people take out a new and bigger loan for repaying their existing debts.

Well, as SC has suggested, cash-out refinancing is an option.
You can also opt to repay your credit cards with the help of consolidation and/or settlement. Weigh the advantages and disadvantages of each of there options and make the decision that suits you the best.
I would suggest you compare both these options and if required, talk to a person who can help you out!