Would you accept this WaMu Modification?

[Joel Fraser]

Hey All, I was recently successful in getting a loan modification from WaMu. It took many months to get this far, so if you're trying to obtain a modification, keep trying. Eventually the persistence will pay off. Now that I have the mod, I am not sure if it's something I should accept or not. I figured I'd post the details here (I just found this amazing resource yesterday), and take from the collective wisdom for the group. Any thoughts, opinions, etc - are very much appreciated. House was purchased in 2005 for $216k. At the time, it appraised for about $240k in Ohio. Currently the house will appraise for about $190k - $200k. I had it on the market for 90 days at $209 and got no bites. I was on a variable rate. It started at 7.55%, and adjusted to 9.55%. The reason I got behind was income and job related. I went from a great six figure income, to a roughly a third of that in the blink of an eye. WaMu is offering to put what I'm behind on the back of the loan. So now I would owe $242k. They'll fix my rate at 7.25%. My wife and I aren't very excited about the prospect of foreclosure, but we're also not very excited about owing $242k on a house that's worth at max $200k. That "sticks" us in this house for a long time. The new payments with our new income are kind of stretch. We can do it, but it's going to be tough. What would you do? Would you negotiate better terms? Walk away? hand it over to an attorney? Once again, I appreciate any advice. I'll post the final details of what happens in hopes that somebody else can benefit from it.