Just to clarify on another answer, there is NOT a 125% limit to the availability of a HARP refinance. Depending on whether you have a Fannie Mae owned loan or Freddie Mac owned loan will determine what lenders might be able to do your refinance. We do have the ability to do a Fannie Mae or Freddie Mac owned loan with NO limit to the Loan To Value (LTV). FHA streamlines with no appraisal use the original appraised value at the time of your current loan, but they do have a 125% limit to the LTV. However, if you got the current FHA loan more than a couple years ago, then there is a good chance your last appraisal was much higher than where your property value is now, so your LTV will likely be much lower.
While short sales are an option, you should definitely check into your refinance options if your rate is higher than current rates and you're able to make your payments. Property values are rebounding quite well this year and you should take your entire financial picture into consideration before any decision. You don't want to damage your credit for the next several years by short selling if you could potentially see your property value get back above your loan balance in the shorter term.
Brian Cardenas, Sr. Mortgage Banker
AmeriFirst Financial, Inc.