Needless to say, I've had trouble with this:

772k first at 6.25% 30 yr. fixed

170k second at 7.29 25yr fixed (100k cask out and put into renovation)

Income 200k and credit in the 800's

Owner occupied three family

The LTV is up for grabs at this point, it appraised at 1.2k back in the spring, and FHA turned me down, I was told their internal machinery spit out 980k.  The loan is not in distress but I've been flustered by how low the rates are, and wondering, is it truly impossible to lower my monthly payments? I'm open to all ideas, Someone at Well's told me to try credit unions after turning me down.  Brooklyn NY is a challenging market I understand, should I give up and be happy with my decent rate, "by historic standards," and move on with my life.

FHA wont have turned you down, it would have been the automatic valuation at the particular LENDER that was attempting your FHA loan. FHA assumes that the FHA appraiser sent to evaluate your property knows what he or she is doing :) Therefore, though a new appraisal would be necessary (need a new one every 120 days), a new lender may find your FHA 772 refi loan completely manageable, even with a lower value.

 I would encourage you to see if there is ANY reason other than value that is causing the banks to turn you down. If the existing second was for home improvement and is now 12 months old with no new cash out, you may have more opportunities than you did in the spring.

Have you explored refinancing just the first loan, while subordinating the second (leaving it be)? I dont lend in NY, but I'd be happy to take a look at the numbers for you and offer you my unbiased opinion.