Can my friend refinance with an upside down mortgage?

Hello, I am researching some options for a family member who is slightly upside down on their mortgage. (I barely made it to refi my condo last year before the value plummetted, so they are asking me about refinancing options). Basically, is there any options when they about 10% upside down on their mortgage ($200k value and a $220k mortgage) Is there only option a loan modification, short sale, or foreclosure? Or is there a refinancing option as well? They have a subprime mortgage w/balloon and wonder what their options are? I believe they are current with their mortgage payments, but I don't know if they have ever been late. Any help/advice is appreciated. by helpmyfriendmort from Chicago, Illinois. Nov 24th 2009 Reply