Thank you so much for your response. What you stated makes a lot of sense and I totally agree. For the neighborhood I live in, and based on comparables used in the appraisal based on when i bought, my house was appraised at a competitive value. That why I really need to see the report to get a clear idea of where this $178,000 came from. The LO told me foreclosures are not supposed to be a factor, so don't know if that's the case here. And if they used comparables, what were the specifics of those properties.

Yes, I do need more than the appraised value to come out whole on the refinance. I have access to $3000 - $4000, so I was also wondering if it would be a good idea to apply that towards my principal to bring the amount owed down. At this point, I'm just trying to think and every angle I can take on this.

Again, thanks for weighing in.