A year into the Home Affordable Modification Program (HAMP), servicers converted 170,207 permanent modifications through February, up from 116,297 in January, according to the US Treasury Department. The Treasury launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. To address critics that claim HAMP isn’t having the effect of reaching its target 3m to 4m borrowers, a House Committee on Oversight and Government Reform in February began an investigation of HAMP on concerns of the “effectiveness and efficiency” of the program. According to the latest Troubled Asset Relief Program (TARP) transaction report, the 113 participating servicers under HAMP can earn a total cap of $36.9bn. The Treasury has slated $75bn for the program. Borrowers in HAMP received a median savings of $518 a month, or 36% of the payment before the modification. More than 91,843 active trial modifications need only a borrower signature to become permanent, totaling more than 260,00 permanent modifications approved by servicers. More than 835,000 three-month trial modifications began through February. Active modifications - both trials and permanent modifications - totaled more than 1m. Wells Fargo (WFC) completed 24,975 permanent modifications, leading all servicers again. Wells had 17,652 permanent modifications in January. In February, Wells had active modifications on 37% of its 379,357 HAMP-eligible loans, up from 38% in January. Bank of America (BAC) provided 20,666 permanent modifications through February, the second-highest volume of all servicers and an increase from 12,761 in January. In November, BofA had 98 permanent modifications. BofA has active modifications on 24% of the more than 1m mortgages in its HAMP-eligible portfolio in February, up from 22% in January. JPMorgan Chase (JPM) had the third most permanent modifications at 19,385 through February, up from 11,581 in January. In February, JPM had active modifications on 39% of the 437,323 loans in its HAMP-eligible portfolio, up from 38% in January. CitiMortgage, a subsidiary of Citigroup (C), provided 15,607 permanent modifications through February, taking its place as the fourth-largest servicer in terms of volume, up from 10,929 in January when it ranked fifth. It has 52% of its 249,901 HAMP-eligible loans in active modifications. GMAC provided 14,675 permanent modifications, dropping to the fifth highest of any servicer, from January when it was the fourth-highest with 11,494 permanent modifications. GMAC has 66,289 loans in its HAMP-eligible portfolio and started active modifications on 53% of them, the highest of any servicer and up from 50% in January. To qualify for HAMP, a mortgage must have a current unpaid principal balance of less than $729,750 be occupied by the owner and originated prior to Jan. 1, 2009. Qualifying borrowers must be employed. More than 57% of the borrowers who received permanent modifications claimed a loss of income as the predominant reason for hardship, the same percentage in January. More than 10% claimed excessive obligation, and 2% claimed illness of the principal borrower. Despite the increases in permanent modifications from 31,382 in November, when the Treasury began reporting that statistic, officials admit the program is not for every borrower. Seth Wheeler, senior adviser to the Treasury when speaking at the American Securitization Forum (ASF) in Washington, DC, said the Treasury is adjusting its focus away from modifications as HAMP is not always the best solution. A new program, the Home Affordable Foreclosures Alternatives (HAFA), will provide incentives to servicers to provide short sales and deeds-in-lieu of foreclosure. HAFA launches in April 5, 2010 as lenders and officials buffer against potential fraud cases. Write to Jon Prior. The author holds no relevant investments.