As much as you do not want a new neighbor, if you really want to help your neighbor, you should recommend that he sell the home, and find somewhere to rent that is within his budget. If he is 100% ltv he can get out no problem, or if need be he short sells. A new budget where he does not have to pay property taxes or homeowners insurance and can simply pay rent would help him alot more the deferring his debt with a loan mod.