It could be 5-10 years before that place has any equity after any sale/transaction fees. If you can barely come up with the current overall payment and if it takes a miracle plan by the government to give out another 5yr low rate plan to all the troubled arm holders, then the decision shouldn’t be that tough.

If you got in over your head, then you got in over your head and their is not much you can do except learn from it. Talk to a CPA about tax implications, check to make sure it is non recourse, feel bad for a moment, then seriously consider walking away now. From what I hear it takes at least 3-6 months after stopping payments to get people out of their homes, so plan accordingly.