Servicers participating in the Home Affordable Modification Program (HAMP) pushed the total number of permanent modifications to 434,716 through July, an 11% increase from the more than 389,198 the previous month, according to the Treasury Department. The Treasury launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. In order to receive a permanent modification through the program, borrowers must make three monthly payments during the trial period and submit all documentation. The increasing number of permanent modifications means servicers are starting to work through the amount of aged loans still in the trial stage. Over the last six months, the amount of these loans has dropped from 166,00 to 118,000. In July, servicers converted 45,518 trial modifications into permanent status with 4,089 permanent modifications canceled for a total 12,912 since the program launched. This includes 272 mortgages that borrowers paid off. The Treasury this month also released the amount of trial modifications that have been canceled by eight particular servicers: Bank of America, CitiMortgage, GMAC, JPMorgan Chase, Litton Loan Servicing, OneWest Bank, Wells Fargo, and American Home Mortgage Servicing. Through June, these servicers have canceled 409,981 trial modifications. More than 45% of these loans were put into an alternative modification, but more than 30% have yet to placed through any other process including short sale or foreclosure. More than 11% of the canceled trial modifications, or 47,000 mortgages, have either been foreclosed on or have entered the process. Just over 2% have gone through a short sale or deed-in-lieu, and on almost 6% of them, the borrower has become current. According to the Treasury, the most common causes of canceling a trial modification are: insufficient documentation, another default during the trial stage, or the borrower was deemed ineligible, meaning the loan was already at 31% of the household’s monthly income. Overall, servicers have canceled 616,839 trials since the program launched last year, up 18% from the previous month. The Obama Administration set an early goal for 3m to 4m borrowers to receive aid under HAMP before the program expires at the end of 2012. After 16 months, servicers have reached over 14% of that mark, up from just over 13% in June. Servicers have offered 1.5m three-month trial modifications through July and have started 1.3m of them.  There are currently 255,934 active trial modifications. Servicers reported 25,362 new trials in July, an increase from 38,728 new trials in June. Borrowers receiving a permanent modification received an average 36% discount on their monthly payments for an average of more than $500 a month. According to the Treasury, borrowers with a permanent modification are guaranteed lower payments for five years and fixed terms at current market rates for the remaining life of the loan. HomeEq, the former servicing arm of Barclays Capital and recently bought by Ocwen Financial Corp. was the top HAMP servicer for the fourth consecutive month. It converted 90% of its trial modifications into permanent status, the highest of any servicer. It has converted 4,403 permanent modifications and holds 14,564 HAMP-eligible loans. Wachovia Mortgage FSB, which converted 81% of its trials into permanent status, made it back to second. It has conducted 5,539 permanent modifications and holds 27,571 HAMP-eligible loans. Carrington Mortgage Services dropped back into third. It had a conversion rate at 80% in June, totaling 2,109 permanent modifications. The big-four banks all had slight conversion rate increases in July. CitiMortgage, the servicing arm of Citigroup, led them by converting 31%, totaling 44,276 permanent modifications, up from 40,813 the previous month. JPMorgan Chase converted 30% for a total of 58,489 permanent modifications through July, up from 54,722 in May. Wells Fargo had a 28% conversion rate, totaling 46,732 permanent modifications, up from 44,628 in May. Bank of America holds the highest amount of permanent modifications of any participating servicer in July, at, up 76,330 from 72,232 in the previous month, a 25% conversion rate. BofA holds 416,879 HAMP-eligible loans. Write to Jon Prior. The author holds no relevant investments.