Hi Marty, sorry about your troubles. You should TALK to your bank about loan modification. Tell them the whole thing. Tell them about your need to refinance. Show them the disability payment. Maybe they will give you an EXTENSION until the market improves a bit, contingent upon you selling in 24 months. This CREATIVE WORKOUT may work -- some banks entertain such situations. Never hurts to ask. Any kind of extension can probably SAVE your credit until the market rebounds a bit more -- it already is starting to -- and you may be able to sell in the black. Otherwise, short sale.
For more credit tips, read my 10 part blog, Top 10 Credit Myths. Link below.