House Financial Services Committee Chairman Barney Frank warned Wednesday that if efforts to increase loan modifications do not pick up pace soon, lawmakers will revive legislation that would allow judges to rework loans in bankruptcy proceedings.

Frank said he is pleased that the Obama administration and servicers were taking steps to improve the Home Affordable Modification Program but said time is running out.

"People in the servicing industry and in the broader financial industry must understand that, if this last effort to produce significant modifications fails, the argument for reviving the bankruptcy option will be extremely strong, and I think there is a substantial chance that the outcome will be different," Frank said in a press release.

His statement came a day after the Treasury Department hosted a meeting with the top 25 banking companies to encourage them to do more loan modifications. So far, the administration has 200,000 trial modifications under its modification program. Bankers pledged to reach 500,000 by Nov. 1.

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