Principal reduction?

[brad10281]

Has anyone successfully modified their mortgage through a reduction in the principal? After about 14 months of not paying my mortgage, which was discharged in a ch7 bk in March 10', I finally got acceptance for a loan mod. I have no intention of staying in this house long term, my family has outgrown it and now we're about $50k underwater on the 1st mortgage. We filed ch7 due to loss of employment and then reduced pay once I went back to work. The terms of the mod say that they'll tack on the ~$20k in missed interest to the loan...definately not good terms for me. That would put me about $70k underwater. I'm thinking about following through with the loan mod just so that I can move out on my own timeline and not theirs. There's very few rentals in my area and I have kids in a good school so I'd like to stay in this area. Does accepting the loan mod mean I'm responsible for the loan again?

Is there any chance that I could get them to agree to a principal reduction? This is the only way that I'll agree to accept responsibility of the loan again.

Any input?

[Pandora]

If you discharged the debt in Ch. 7 - generally with a mod you still arent responsible for it and can walk away later if need be. You need to look at your mod paperwork that was sent to ensure the terms of the discharge are in it; it should have a reference to Ch. 7 filing. You arent taking out a new loan, you're modifying your original loan terms

Reductions are few and far between and given you received an offer to perm. mod your loan, thats more than many get; you cant force the lenders hand to reduce unfortunately.