Unfortunantly, you are in a bad situation along with many many other people. There are a few mortgage lenders who aren't doing appraisals but they they typically run it through a logarithm program to come up with a "value" for the home, but in general, the bank is required to make sure that they aren't loaning more money on the home then it's worth, since it becomes the collateral for the loan. As a result, when they do a refi and the appraisal is much lower than the loan, they require the home owner to bring the difference to the table before they will refi it, even if the amount of the loan stays the same.
I would talk to a HUD counselor in your area. They will know if there are any programs in your area that might help you... more