Roughly 25% of the mortgage modifications Citigroup (C) completed through its own private programs redefaulted over the past two years, the bank's Chief Financial Officer John Gerspach said Friday. Over the past nine quarters, the bank converted $5.7 billion in a trial modification into permanent status. More than three-quarters of these went through the government's Home Affordable Modification Program. Redefault rates on these HAMP workouts totaled less than 15%. Citi reported $3.3 billion in earnings for the second quarter as it continued to reduce its Citi Holdings portfolio, which contains $73 billion in these mortgages, down 19% from one year ago. Loans in 90-day delinquency dropped 13% to $3.9 billion in the second quarter, less than half of the total from one year ago. "The sequential decline in first mortgage delinquencies was primarily due to continued asset sales, as we sold nearly $800 million in delinquent mortgages," Gerspach said in a call with analysts. The Treasury Department launched HAMP in March 2009 and although it resulted in a fraction of the originally estimated 3 million o 4 million modifications, it provided a skeleton around which banks could design their own programs. At the same time, HAMP experiences redefault rates far less than these private initiatives Citi ended the second quarter with roughly $10 billion of its total loan loss reserve allocated to its North American real estate lending portfolio within Citi Holdings. "Going forward, we expect fewer new modifications, while some portion of our previous modifications will re-default," Gerspach said. "As a result, delinquency trends may deteriorate; however, this is already factored into our net loan loss reserve balances." Write to Jon Prior. Follow him on Twitter @JonAPrior.