A program that complements the Home Affordable Modification Program (HAMP), establishing a system for modifying second liens securing residential properties, is still on track despite reports to the contrary, according to the US Treasury Department. The Treasury administers HAMP, which then allocates capped incentives to servicers in order to pursue modifications of troubled mortgages rather than foreclosure. The main program has seen a rocky start in 2009, but officials testify it remains on track to reach the target volume of borrowers. The Calculated Risk blog in a post this week that sought to get an update on the program that supports second liens said housing economist Tom Lawler e-mailed the HAMP administrative Web site asking for a list of servicers. According to the post, Lawler received a response that said: “That program is currently on hold and there is no list of servicers that registered before it was placed on hold.” However, the Treasury denies the email is accurate: "That rumor is wrong," Treasury spokesperson Meg Reilly, told HousingWire. "The Second Lien program is moving forward," she added. "Treasury has been working to create program infrastructure and technology, including a new platform that matches second liens to first liens modified under HAMP." HAMP for second liens -- additional loans securing a property -- aims to make modificaiton progress smoother on properties that are secured by multiple mortgage liens. Since holders of second liens have a separate claim on the underlying collateral than primary lien holders, getting the two to agree on modification is a delicate process. So far, the HAMP for second liens -- announced in April 2009 and added to the HAMP Web site with administrative process apparently in place -- has not seen the same success as primary HAMP in media coverage, prompting some to question whether the program is operational at all. Industry sources on the securitization side have for months said HAMP must address the issue of second liens. At a congressional hearing in early December, officials told House lawmakers a clearinghouse might be required to mediate between first and second lien holders until a modification can be agreed upon. But no one solution is readily evident. Broad modification of loan terms or principal forbearance is hindered where second liens create a conflict of interest. The Treasury's task of creating a system that mediates between first and second lien holders, servicers and borrowers represents not only new waters for mortgage servicing, but an entirely new body of underwater mortgage liens. "Because there has not been a systematic method of notification to second lien holders when a first lien on the same property is modified, ramp-up has taken some time," Reilly says. "We have made enormous progress and continue to move forward with technological development and program implementation and expect to finalize servicer contracts soon." Write to Diana Golobay.