First, HARP loans allow above 100% financing. You cannot combine the two but you can refinance just the first mortgage. In fact, lenders are faster and easier in subordinating 2nd mortgages these days when they know the 1st is going to be a HARP refinance.
James' suggestion regarding a FHA loan is a good one. Especially since you can have above 100% of the property value between the two loans and still do a FHA loan. The FHA loan can only go up to 97.15-97.75% of the value but the 2nd mortgage can go above this amount.
I'll need figures of your value to determine which options best suit you.
This blog post I wrote will help answer some of your questions:
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
It sounds like your main concern is the 20% loan, because that is set to adjust, am I right? Do you know where it is set to adjust to?? A lot of 2nd mortgages are tied to prime rate or the treasury rate, and those two indexes are pretty low right now so a lot of them actually adjust DOWN. Check your note to find out the terms of your 2nd mortgage.
As far as rolling them together, I'm afraid that won't be possible if the value has gone down. You may however be able to refinance the first mortgage using either a HARP refinance (through your present lender) or FHA loan (any FHA approved lender should be able to help).
Either of these loans will require an appraisal though and will also require the owner of the 2nd mortgage to allow you to "subordinate" their 2nd loan, which means they agree to stay 2nd in line in terms of liens. It's not a guarantee they will agree, especially if you're adding to your principal balance on the new first (rolling in closing costs for example), however like Keane said in a lot of cases nowadays they are agreeing to do it.
A lot of people are in your same situation, especially here in Michigan Geegee. Best of luck
As unfortunate as it is, the banks are inundated with these right now and in my experience my clients are not getting their attention until they are at least 2-3 months in arrears. A short sale might be an option, but I would contact another lender first. There are many variables that could come into play that you have not shared, so it is difficult to give an accurate detailed answer.
Refinancing will likely not be an option, as you need enough value there to substantiate an appraisal at value.
If you have a financial hardship, a short sale may be an option. Initially, you may want to call your lender on the 20% and see if they will work with you in any way.
If you want to explore a short sale in more detail, please keep my contact info handy.
Real Estate One