Mortgage servicers started just 16,321 three-month Home Affordable Modification Program trials in June, the fewest since the program launched in March 2009, according to an analysis of Treasury Department data.
Over the more than three years of operation, participating servicers started nearly 1.9 million trials under HAMP, of which 818,000 permanently modified mortgages were active in June.
When the program began, servicers swept many borrowers into trials without verifying income or employment. In October 2009 alone, more than 158,000 trials began. By the end of 2009, servicers had started more than 900,000 trials.
The Treasury had to adjust and wrote new rules to require documentation before entering a trial. The backlog of more than 190,000 trials aged six months or longer counted in May 2010 shrank to roughly 11,400 by June.
Just $9 billion of the nearly $30 billion Congress allocated to Treasury housing programs has been spent as of June 30.
The Treasury estimates roughly 731,211 borrowers remain eligible for HAMP, but recent changes may expand that somewhat.
In January, the Treasury announced relaxed rules meant to expand the program. Debt-to-income requirements were eased and investors would get paid triple for allowing principal write-downs under the program. Real estate investors who own five or fewer homes will be allowed to modify underlying mortgages as well, which could add to the numbers.
HAMP was also extended to the end of 2013. It was originally set to expire at the end of this year.
But some servicers were slow to implement the changes. The Federal Housing Finance Agency this week refused to allow Fannie Mae and Freddie Mac to participate in the principal reduction alternative as well.
Roughly 89,000 permanent HAMP modifications included a write-down as of June.
Treasury officials said the program provided the blueprint servicers used to design their own programs. Redefault rates remain below industry averages. According to Treasury data released Friday, more than two-thirds of the mortgages modified in the first year of operation are still current today.
