With the Making Home Affordable Modification Program (HAMP) in full swing, trial modifications at mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) more than tripled from June to August, from 66,200 to 202,200. Completed modifications declined 13% to 32,300 due primarily to the new modification program’s three-month trial period before the modification is considered complete, the Federal Housing Finance Agency (FHFA) said in a foreclosure prevention report Friday. As Fannie and Freddie began implementing HAMP in place of other traditional modification programs and repayment plans, completed actions to prevent foreclosures declined 25% to about 58,200 during Q209. “We expect the number of completed loan modifications to increase as homeowners complete the HAMP trial period,” said Edward DeMarco, acting FHFA director. “Fannie Mae’s and Freddie Mac’s efforts with servicers and homeowners are critical to preventing unnecessary foreclosures and to keeping people in their homes.” Borrower’s monthly payments decreased by 20% or more for 54% of loan modifications completed during the quarter, an increase from 8% of all loan modifications one year ago. The government-sponsored enterprises (GSEs) increased short sales 45% during the quarter to 11,700. The FHFA said the increase was due to more seriously delinquent loans in the pipeline and increased authority given to Freddie Mac servicers to complete the transactions. Despite the efforts, mortgage delinquencies continued to increase. The agency attributed this to higher unemployment levels and moratoria associated keep delinquent accounts active rather than transition to foreclosure proceedings. The number of one-month delinquent loans increased 11% to 682,000 and 60-days or more delinquencies increased 21% — about 227,200 loans — during the second quarter to 1.3m total delinquencies. But GSE delinquencies are still lower than other government-backed loans. The GSE rate of delinquency was 3.5%, compared to 4.7% for VA loans, 7.8% for FHA loans and the industry average 8.0%. The GSEs’ loan portfolio now sits at 30.4m mortgages, an increase of 0.2% from the Q109 as new purchases and issuances outpaced loan liquidations, the FHFA said. Fannie and Freddie had a combined nearly 300,000 foreclosure starts in Q209, bringing the total of foreclosure starts for the first half of 2009 to more than 543,000. The real estate owned (REO) inventory at the GSEs is near a combined 100,000 single-family properties, according to 10-Q filings with the Securities and Exchange Commission (SEC). Write to Austin Kilgore.