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HAMP Trials at Lowest Level Since Program Started

Mortgage servicers started just 16,321 three-month Home Affordable Modification Program trials in June.

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.

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.

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