The Making Home Affordable anti-foreclosure program has been widely criticized for falling short of expectations, but it seems to have reached a sort of equilibrium recently.

The number of mortgage loan modifications performed under the initiative's Home Affordable Modification Program (HAMP) has been running fairly steady over the past six months, with roughly equal numbers of trial modifications begun and permanent modifications granted.

The Treasury Department reports that over that period, new trial modifications have been averaging about 27,000 a month, while those graduating to permanent modifications have been running around 29,000.

That's a big change from the up to 150,000 borrowers a month who were being admitted to the program about a year ago. But those big numbers also brought big headaches, as many turned out to have been admitted to the program without being properly qualified, and long delays in getting qualified borrowers approved for permanent modifications after completing their trial periods.

Tighter admissions criteria a factor

New admissions to the program dropped sharply last spring, after the Treasury Department announced it would require stronger proof of eligibility before qualifying borrowers could begin trial modifications. Meanwhile, mortgage servicers gradually worked through the backlog of existing trial modifications, eventually approving about 44 percent for permanent modifications, with the rest rejected or canceled voluntarily.

Over the past six months, however, both the number of trial modifications initiated and upgrades to permanent modifications have been running fairly steady and at near equilibrium, according to figures from the program's January performance report, released Wednesday. The numbers for January itself were almost right on the recent average, with close to 27,000 new trial modifications begun and roughly 28,000 permanent modifications granted.

On track for one-third of goal

At that rate, the program would still fall far short of the goal of 3-4 million permanent modifications set when the program was launched in March 2009. Just over 600,000 have been granted as of January, according to the new report, with 145,000 trials underway.

At the current rate, that would mean about 1.3 million permanent modifications by the time the program is due to expire on Dec. 31, 2012, or about one-third of its original goal. That's slightly less than the 1.4 million eligible delinquent mortgage borrowers not in the program that the Treasury Department calculates are out there as of Dec. 31, 2010.

House Republicans have introduced legislation to kill the program, calling it a failure and wasteful. However, the program is strongly backed by the Obama administration and it's not clear that the Democrats who control the Senate would be willing to write the program off as long as it continues to be at least partially successful in meeting its goals.

Published on March 3, 2011