Just 9% of eligible homeowners have had mortgage modified

— -- Some of the nation's largest servicers are making minor progress in reworking home mortgages into more affordable monthly payments for financially strapped homeowners.

In total, just 9% of eligible homeowners who are delinquent have gotten a trial mortgage modification under a federal program, according to a report Tuesday by the Treasury Department. The report lists the modification progress of major lenders since the Obama administration first announced a $75 billion housing recovery plan in March.

"We have been disappointed …about the variation in service performance in helping people in a timely fashion and with the respect they deserve," says Michael Barr, Treasury's assistant secretary for financial institutions. "We're going to be requiring ramped up efforts across the board."

Among major lenders, Bank of Americabac trails other servicers in the number of mortgage modifications it has made: It has modified only 4% of the eligible mortgages in its portfolio that are 60 or more days delinquent.

In the lead is JPMorgan Chasejpm, which has begun trial modifications for 20% of eligible homeowners. Wells Fargo wfc has started modifications for 6% of eligible mortgage holders.

Several smaller companies — including American Home Mortgage Servicing and PNC Financial Services Group — have yet to modify a single loan, according to the report.

American Home Mortgage Servicing just started the program on July 22, a spokesman said. PNC, which owns National City, was up and running in early July.

"National City is working with qualified customers to make mortgage modifications available. There are loan modifications in the process," said PNC spokesman Fred Soloman.

So far, about 235,000 trial modifications have begun. If the trial modifications work successfully for three months, they then go into full effect.

During a meeting last month with representatives from 25 major servicers, the government announced its goal reaching 500,000 trial mortgage modifications by Nov. 1.

Under the program, servicers covering more than 85% of loans in the USA are participating in the plan to modifying loans. More than 400,000 modification offers have been extended.

While Treasury officials say the pace of modifications puts the program on track to offer assistance to up to 3 million to 4 million homeowners over the next three years, Barr says some servicers need to take steps such as ramping up capacity or treating borrowers better when they contact lender call centers.

Some lenders defended their progress, say they're making modifications at a fast clip and that their overall delinquency rates are low. Wells Fargo said in a statement that through the first seven months of this year they modified more than 240,000 mortgage loans, including 20,219 trial modification starts under the federal program.

They say they've hired and trained 4,000 staffers in the first half of the year for a total of 11,500 U.S.-based staff. The company also says that within weeks it will eliminate its customer service backlog.

Contributing: Associated Press

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