The number of U.S. borrowers who will be dropped from the Obama administration's home foreclosure prevention program will continue to outpace the number of people who receive new loan modifications "for the next few months," the Treasury Department said.
According to data released Friday, almost 630,000 of the nearly 1.3 million government modifications have been canceled since the program began in March of last year.
In July only 24,577 borrowers received new trial modifications, the data showed.
June's data showed 38,728 borrowers received new modifications.
Though the Treasury expects new trial cancellations to "gradually decline," those cancellations will continue to exceed the number of permanent modifications "as servicers clear their backlog of aged trials," it said.
The number of aged trials initiated six months ago has decreased by 48,000, to 118,000.
As decisions on the remaining trials will be made in August, "homeowners are not subject to foreclosure sale," the Treasury said.
Roughly 37,000 homeowners received a permanent modification in July, compared with 51,205 in June.
Under the program, homeowners who qualify can have their mortgage payments cut to 31% of their monthly income by extending their loan term to 40 years or slashing their interest rate to as low as 2% for five years.
Participants in the Home Affordable Modification Program must make three monthly payments during a trial period before they receive a permanent modification.
The Obama administration has said the effort would help as many as 4 million people hold on to their homes. But critics say the program is not on track to meet its goals as foreclosures continue to mount.
