I'm in the same boat. I bought our condo in 2002 for $173K it is now worth $120K and I owe $140K Right now I am underwater for about $20k. I have a conventional loan through B of A, so I am ineligible for any refinance options as well. My Intereste rate is over 6% and it is killing me to see it almost 3% lower, and there is nothing I can do about it. We are probably going to rent our place out, and move to something larger. Hopefully we will rent it until we break even, then we will sell it.