Servicers completed 27,840 permanent modifications through the Home Affordable Modification Program in September, down 16.5% from August, according to the Treasury Department. The Treasury launched HAMP to provide incentives to servicers for the modification of loans on the verge of foreclosure. Since the program launched in March 2009, servicers have completed 495,898 permanent modifications, and extended 1.6 million trials. In order for a borrower to receive a permanent modification, three monthly payments must be made and all documents must be sent in during the trial period. Homeowners had their monthly payments reduced a median of 36%. According to the Treasury, fewer than 16% of borrowers who did not meet HAMP requirements fell into foreclosure. That means with 729,114 trial and permanent modifications canceled since last March, more than 116,658 failed HAMP mods were foreclosed on. The rest went through either the banks' own programs, a deed-in-lieu or a short sale. Of all mortgages that had been converted into a permanent modification, 15.6% fell into 60-plus day delinquency within nine months of the conversion, and 11% fell into 90-plus day delinquency. After six months of the conversion, 9.8% had gone into 60-plus day delinquency, and 5.5% into 90-plus. "Unfortunately, with the slow economic recovery and continued high rates of unemployment and underemployment, some customers are having difficulty sustaining even reduced payments, and we are and will be working with many of them toward a smooth and dignified transition to alternative housing arrangements in the coming months," Rebecca Mairone, default servicing executive at Bank of America (BAC), said in the bank's announcement of its numbers (see below). Wachovia Mortgage FSB stepped into the top-servicer spot in HAMP, based on percentage. It converted 86% of its trial modifications into permanent status, up from 80% in August. The company has conducted 10,550 permanent modifications and holds 25,165 HAMP-eligible loans. HomeEq, the former servicing arm of Barclays Capital recently acquired by Ocwen Financial Corp. (OCN), dropped to second after five-consecutive months at the top. It converted 83% of its trial modifications into permanent status for a total of 4,949 permanent modifications and holds 13,965 HAMP-eligible loans. Ocwen stayed in third, converting 73% of its trials into permanent mods. It has totaled 18,646 so far. The big-four banks all had slight conversion rate increases in September. CitiMortgage, the servicing arm of Citigroup (C), led them by converting 34%, totaling 49,538 permanent modifications since the program began in March 2009, up from the 47,236 total in August. JPMorgan Chase (JPM) converted 33% for a total of 62,368 permanent modifications through September, up from 60,932 through August. Wells Fargo (WFC) had a 30% conversion rate, totaling 50,815 permanent modifications through September, up from 48,830 through August. Bank of America held the highest amount of permanent modifications of any participating servicer through September, at 78,905, and a 27% conversion rate. It was a reduction from 79,859 total HAMP mods through August, because, according to BofA, the Treasury subtracts previously reported mods if the mortgage has been paid off, the servicing rights were released to another servicer, or the loan fell 90-plus days delinquent since entering into a completed modification. BofA holds 375,168 HAMP-eligible loans. Write to Jon Prior.