What do you think about this? refinance question?

We have an investement property- a 2 family home. We are collecting less rent than the mortgage paymentt This has been the case for a while. I decided to call the bank to see if they would give us a loan modification (last year they would not). However this year, they say we are eligible for a Fannie Mae refinance, since our loan exceeds the value of the home and we would otherwise not qualify.

When I go online and use the online tool with my information/account in the system, 30 year fixed rate is 4.875%, but loan officer is giving me 5.65%. The option he is giving me says I will save $ 445 monthly. Closing will cost between 6K and 9K. When I ask why, I feel like he is giving me the run around and is not answering my questions…he says

“That is based on a certain scenario, but this is the best option for you because you are upside down anyway”. (meaning I owe more than house is worth). When I asked him to give me other options..he said

“You are already upside down on your house, don’t you want to save money?” When I asked him to explain the scenario in which I would get the 4.875%, he said “At this point it really doesn’t matter because you are upside down” –

When I asked him to tell me the interest rate on a 7 yr. ARM- he said I would be paying almost the same thing- but did not give me a dollar amount or interest rate. When I told him I wanted to discuss with my husband, he said- “What do you need to discuss, do you think he’d have a problem saving money?”

I have not signed the papers yet and don’t know if I want to. Should I contact a different loan officer. Is this one doing the right thing. I just want answers and he’s not giving them to me. Or should I just suck it up and sign. My current rate is 7.5% and loan amount is $ 402K.
New loan amount will be at least 410K. According to them, the house is worth $ 383K
The Refinance option is PART OF the making home affordable program. Obviously I don’t qualify for a modification, but I DO qualify for a refinance under this program…I know what I’m talking about in regards to that, just want to know what you all think about the representative who’s ignoring my questions!!
under normal circumstances I would not qualify for a refinance..
Less rent is because yes, we did make some bad choices, but more than that have trouble attracting tenants who can pay a $ 1700 rent (which is what a 3BR goes for in NYC), so rented for $ 1400- ended up evicting anyway. Before eviction rent collected was $ 2650, mortgage payment is $ 3215. After eviction= less rent collected.
we are not behind on payments, we are doing the right thing I thought by taking out of savings, so cannot qualify for any of deed-in lieu, forclosure assistance, etc. because we are up to date.

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