Is it worth paying off 2nd mortgage balloon payment?

I have 260K 1st mortgage at 5.25% and 49K 2nd mortgage at 7.5%.
My 2nd mortgage is a balloon loan due next April.
The home market value is 265K.
Do I need to payoff my balloon payment?
Is it worth paying of the balloon payment when we have negative equity?
Is there any way to avoid this balloon payment?
I have contacted the bank. They said I need to contact them 2 months before expiration ie February. I need to show financial hardship to get 2nd mortgage modified.

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