Can I refinance?

[Administrator]

I have a 2year ARM that is going to adjust in Jan 2008. I called my lender and they told me that the rate is going up aprox. 3% so that can bring my interest rate up to about 9-10%. I absolutely cannot afford that increase, so they told me they would send me a hardship package. I wanted to know if I could refinance and they basically told me I need three things: 1. Working 2. Equity in the home 3. Good Credit. We work and we have good credit, but because of the market my home has lost value. So they told me I probably wouldn't be able to refinance.I got to thinking and the loan that I have is a 80/20 loan and the only one we need to refinance is the 80 loan which is for about 330,000. I purchased the home for 416,000 and the value of it now is probably around 375,000-400,000.So my question is, would I be able to refinance the 1st mortgage (80) since it isn't more than the value of my home.I hope I haven't confused you. I really need some advice because I want to avoid a forclosure at all costsThank you


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(Source: mortgagefit.com)