By Angela Carter, Register Staff
acarter@newhavenregister.com

The number of troubled homeowners who received permanent modifications to their mortgage payments increased by 68,000 in April. However, the number of participants who failed to complete a trial phase of the federal Home Affordable Modification Program (HAMP) also is on the rise.

More than 299,000 homeowners had received permanent loan modifications as of last month, the Treasury Department said Monday.

That’s about 25 percent of the 1.2 million who started HAMP since its March 2009 launch. They are paying, on average, $516 less each month.

To complete the program, borrowers must make at least three payments on time during the trial phase.

About 277,000 homeowners, or 23 percent of those enrolled, have not done so and dropped out.

That’s up from about 155,000 a month earlier.

In Connecticut, there were 8,092 active trials in April and 3,918 modifications, according to the monthly report released jointly by the Treasury Department and the U.S. Department of Housing and Urban Development.

The cumulative reduction in monthly mortgage payments is $3.1 billion to date nationally, federal officials said.

“The number of homeowners receiving significant relief through a mortgage modification continues to rise,” Phyllis Caldwell, chief of Treasury’s homeownership preservation office said in a statement. “Our focus now is on improving the homeowner experience and holding servicers accountable for their performance. Increased transparency through more robust reporting of servicer-specific data will contribute handily to those efforts.”

In today’s mortgage industry, the original lender might not hold and service each loan until it is paid off. Loans and the rights to service them can be bought and sold. Continued...

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Mortgage servicers are responsible for collecting monthly payments and crediting the borrower’s account.

They also can handle the escrow accounts that hold borrowers’ money for periodic tax and homeowners insurance payments.

Among the large servicers are Bank of America, JP Morgan Chase, Wells Fargo Bank, CitiMortgage Inc., OneWest Bank and GMAC Mortgage Inc.

The federal report highlighted a “wide variation” among them when it comes to giving homeowners a timely decision on whether they qualify for a permanent modification.

Last week, the Obama administration held a summit to help improve the performance of servicers who are handling accounts of homeowners seeking permanent modifications.

HAMP is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years.

The Associated Press contributed to this report. Contact Angela Carter at 203-789-5752.

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