I understand your concerns, there are a lot of foreclosures happening in all the neighborhoods.
To answer your question, you are upside down on your home if you owe more than you could sell your home for right now. Many people are in this situation, but it does not mean that they can Short Sale their home; nor would I recommend trying it. It is important to note that if you plan on staying in your home for more than a couply of years you probably will end up being ok once the majority of foreclosures are finished and regular resales become predominant again.
Feel free to call me if you have more questions or would like to talk about this in greater depth. Have a great day!
It depends on what you financed, if you owe more than 129,750, then it is considered that you are upside down . IF you had to sell and you owed more than you sold the home for then that would be considered a short sale, and you would lose the monies that put down on the home.