Bank of America (BAC) reported 12,700 permanent modifications under the Home Affordable Modification Program (HAMP) through January, an increase from 3,200 a month earlier. The US Treasury Department launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. Through December, servicers provided 66,000 HAMP permanent modifications. BofA came under fire from critics after the November 2009 progress report showed it provided 98 permanent modifications of the more than 1m HAMP-eligible loans in its portfolio. At the outset of the program, servicers rushed borrowers into the HAMP three-month trial period to collect the necessary documents for a permanent modification along the way. BofA shifted its focus to collect documents from borrowers before entering a trial, making the conversion into a permanent modification easier. Soon after, the Treasury and the Department of Housing and Urban Development (HUD) changed the guidelines on how all servicers would introduce borrowers into the program. Beginning June 1, 2010 borrowers have to submit all documentation to the servicer before entering a HAMP trial. “These results are attributable to the resources — including expansion of our default management staffing to more than 15,000 — and focus we have placed in support of this and other homeownership retention programs,” said Jack Schakett, credit loss mitigation strategies executive for Bank of America Home Loans. But the House Committee on Oversight and Government Reform launched an investigation into the effectiveness of HAMP. The credit rating agency Standard & Poor’s even questioned the permanency of the modifications when analysts predicted 70% of all cured loans would re-default. Other initiatives are on the way. BofA was the first servicer to sign a contract with the Treasury on the HAMP second-lien program, and the Home Affordable Foreclosure Alternatives (HAFA) program, which provides incentives to servicers to purse short sales and deeds-in-lieu of foreclosure for borrowers who do not qualify for HAMP, will launch in April 2010. Write to Jon Prior. The author holds no relavent investments.