WASHINGTON — Obama administration officials tried to win support Wednesday for recent changes to their foreclosure prevention program, but lawmakers and industry participants remained skeptical.

Despite widespread criticism that the plan has so far failed to stave off a wave of defaults, administration officials testified that recent alterations in the Home Affordable Modification Program would significantly improve its effectiveness. By targeting principal reduction over other methods, officials said, the plan would have a greater impact.

"Facilitating principal writedowns for homeowners who are now in mortgages that place them dangerously close to default will enable them to restructure their debt, refinancing into more sustainable loans," said Federal Housing Administration Commissioner David Stevens at a hearing of the House Financial Services Subcommittee on Housing and Community Opportunity.

But consumer groups and others openly voiced doubt about the program's prospect for success, noting that it remains voluntary.

"Despite the concept of FHA's refinance program having maximum benefit to homeowners and investors, we fear servicers will not implement this new program and will instead choose a modification that benefits their own interests and leaves the homeowner in a distressed financial position, likely to default in the future," said Vincent Fiorillo of Doubleline Capital LP on behalf of the Association of Mortgage Investors.

The administration announced a Hamp revision on March 26 that is designed to reduce foreclosures by aiding the unemployed, encouraging servicers to offer principal reductions to underwater borrowers and allowing some underwater borrowers to refinance into FHA loans. Stevens estimated 11 million to 15 million mortgages are underwater.

Though the Hamp revision's focus has been commended, the Congressional Oversight Panel for the Troubled Asset Relief Program said the changes, many of which do not take effect until this fall, come too late to have a meaningful impact. The panel released a report Wednesday that said the administration's efforts are not keeping pace with the foreclosure crisis and that the changes will not really be felt until early 2011.

Lawmakers, too, said the changes were too little, too late. "Both sides of the aisle, we are not happy and we are really concerned about the inability to move something substantial," said Rep. Maxine Waters, D-Calif.

But Phyllis Caldwell, the Treasury's chief homeownership preservation officer, defended the government's actions and altered strategy. "We continue to see challenges," she said. "Servicers were slow to implement Hamp, resulting in a slow start for the program. Recent improvements in the program have accelerated the pace of modifications. But our strategy to address the crisis must evolve because our challenges have also evolved."

At the hearing, consumer groups continued to push for mandatory changes. However, Robert Story Jr., the chairman of the Mortgage Bankers Association and president and CEO of Seattle Financial Group, supported the unemployment assistance changes but said forcing modifications would be going too far.

"We do not oppose such principal writedowns at this time, as long as they remain voluntary," he said.

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