firstly can I congratulate you on your success - you've obviously worked hard to lose the weight - it's a pity you didn't exercise during this time it's not a big deal you can get the body you want.
My first reaction was sorry loose skin is generally there to stay and you'd have to get it surgically removed however then I started thinking because you asked about the muscle underneath. I believe that it is the muscle underneath that you need to increase in order to "fill" the space the fat occupied.
I decided to have a look on the net to see if there is anything out there and I thought you would might like to check this out...
To eliminate the droopy appearance of the remnants of excess body fat following weight loss, without resorting to surgical procedures, you must change your body composition, not just lose bodyweight. That means paying particular attention to the ratio of your body fat to lean body mass. Gaining muscle to replace some of those lost pounds of body fat and preventing loss of lean body mass while dieting will dramatically improve your appearance.
It is possible to be at the ideal bodyweight according to Body Mass Index charts (BMI), but still have too much body fat and not enough lean body mass. For example, a young woman in her twenties with "loose skin" recently appeared on a popular radio talk show. She had lost over two-hundred pounds in one year, and her bodyweight at 5' 8" was now in the 120's. Yet, her abdomen was covered with flabby skin that hung off of her. I would guess there is at least another 20 pounds of excess body fat stored in those folds of skin. However, if she lost another 20 pounds of bodyweight, she would obviously look like an emaciated stick! But, that's not because she is too low in body fat...it's because she lacks sufficient lean body mass!
http://www.bodyfatguide.com/LooseSkin.htm
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