We bought our house two years ago at the height of the market. It cost $332K and the tax appraisal was for $350K. Now the tax appraisal is lowered to $283K and that's probably all our home is worth - but we still owe $305K on it! We have $25k in cash saved but if we used it to make up the difference we'd have no money left to buy another house with (it would be hard to find a place to rent that would allow 4 dogs). But, because we have that cash, our lender (Bank of America) wouldn't do anything to modify or refinance our loan since we're not at risk for defaulting (currently we're using almost $1K a month from savings to make up the shortfall). Current rents for a nice little lakefront home like ours would be around $1900 or max $2K a month, but our monthly PITI is $2900. We have good credit (720) and we're reticent to do a short sale and ruin the credit (also I think with cash on hand we wouldn't be allowed to do a short sale?) Advice, please! Is there anything we're not thinking of? We live in NY. Thank you in advance.