I too have been offered a loan modification from Ocwen with principal reduction in California on my first loan and am working with them on a payoff of the second. All terms seem acceptable but I do not understand this language in the agreement: "Upon modification, the new amount payable under your note and the Mortgage will be increased to theactual amount of debt owed on your loan". Also, my mortgage was purchase money only making it non-recourse. Does anyone know if signing a modification in California makes it a recourse loan? Any help would be appreciated. The modification offers a principal reduction and reduced interest rate. No mention of a balloon payment. Sounds too good to be true. If it later turns out it is not what it appears I want to still have the option of walking away.