The Treasury Department released data Thursday on activity in its Making Home Affordable (HAMP) program during the month of November.  As expected from earlier comments made by Treasury officials, borrowers continued to enter the program under trial modifications, but the rate of permanent modifications remains well below expectations.

Cumulative figures for the program by the end of November show participating servicers had sent a total of 3,137,548 requests for financial information to borrowers thought eligible for the foreclosure prevention program and had extended 1,032,827 invitations to participate in a trial modification program, up from 920,000 in October. 

There are currently 728,408 borrowers actively participating in loan modifications, however, only 4.3 percent of those modifications, or 31,382, have been converted to permanent status.

The HAMP program involves 78 servicers who manage approximately 85 percent of eligible mortgage debt in the country.  These servicers are paid an incentive by the Treasury Department for enrolling troubled borrowers in the program and completing loan modifications.  The workouts must lower borrower payments to a maximum of 31 percent of the borrowers' monthly income.  It is estimated that homeowners who are enrolled in the program have saved an average of $550 per month on their mortgage payments.

GMAC has been the most successful servicer in converting trials to permanent modification status with 7,111 completions.  J.P. Morgan Chase and Ocwen Financial have each converted around 4,300 loans.  Some servicers have completed no conversions and one or two have not enrolled even one borrower in trial programs.

The number of trial modifications in November rose nearly 11 percent over October's figure of almost 660,000 but 30,650 of the modifications started in the seven months since the program got off the ground are no longer active.  This is roughly the same number as have moved into permanent status.

In a written report to the House Financial Services Committee earlier this week, Assistant Treasury Secretary Herbert Allison warned that performance figures would be disappointing.  He said that, while most borrowers in trial programs are current on their payments, servicers blame the lack of conversions on missing documentation from borrowers while the borrowers and mortgage counselors assisting them are complaining that servicers are mishandling and losing data that is submitted   He told the committee that Treasury is moving to improve the conversion figures by working more closely with servicers, withholding incentive payments until conversions are complete, and improving the HAMP website to make it easier for borrowers to comply with program requirements.