Just like a standard purchase or refinance loan, you need to qualify for a Loan Modification. The qualification process on a Loan Mod works in a nearly reciprocal manner as its standard mortgage counterpart. With a Loan Mod, you want to prove you can't pay the current payment and can only afford a reduced payment. This does not mean, however, that you can have no income. The bank wants to verify that you are making less, but with certainty that if they reduce your payment  that you can make the new reduced payment.  If you are out of work and collecting only unemployment and you don't have any added spousal income, then chances are that the bank will simply foreclose on the property (or if they are kind, give you a few more months to find work before they foreclose). 

Look at it from the bank's perspective, if youre not working, the bank is just letting you live in and on the property for free and receiving nothing in return. How quickly the bank gives you the boot depends heavily on whether property values are increasing or decreasing in your area.  If they are moving up, then they'll want you out and want to stick a for sale sign in the ground. If they are dropping or you are severely underwater, the bank may be more likely to let you squat until your job situation changes.