Since the inception of the Making Home Affordable program in March of this year, ever increasing numbers of homeowners have benefited from the plan. However, many borrowers could still lose their homes due to shaky economic conditions.

The Making Home Affordable program subsidizes the costs of loan modification for both lenders and borrowers, in an effort to lower the monthly mortgage payments for borrowers. It is estimated the up to 9 million Americans are eligible for this type of loan modification.

However, many potential borrowers are reporting they are having considerable difficulty when attempting to get information about the program from lenders.

According to some estimates, over 650,000 delinquent borrowers received some form of relief to help prevent foreclosure. However, the Treasury Department notes that this is a mere 20% of the borrowers eligible for assistance.

Most of the eligible borrowers are from states that have been making headlines for record-breaking foreclosure rates and fiscal insolvency. In California, over 130,000 borrowers were able to get foreclosure help, and in Florida, approximately 82,000 got help, largely through interest-rate reductions under the loan modification program.

45 lenders, including 5 well-known mortgage service providers are participating in the program. Citigroup is leading the pack, having provided up to 40% of loan modifications to date, while Bank of America comes in second, with approximately 14%.

Treasury officials are pleased with the performance so far, but indicate that there is plenty of work ahead to ensure borrowers stay solvent.

Many of the difficulties in completing the loan modification process with borrowers seems to be in the administrative details. Delinquent homeowners must provide considerable documentation in order to prove they are eligible during what is called the “trial phase” of the modification process. They must also make several payments. If this trial phase is completed successfully, the loan modification will be made permanent. Initially the trial phase was to span three months, but had to be lengthened due to lenders having difficulty collecting comprehensive information from borrowers.

As a result of these administrative hassles, the Congressional Oversight Panel, responsible for monitoring the Trouble Asset Relief Program (TARP) funds, indicates that fewer than 2,000 out of 400,000 borrowers had made it to the permanent modification stage.

Some government officials wonder if the $75 billion in outlays for the program are being used effectively. Economists are also predicting many borrowers are likely to default in the future, and that even these efforts cannot prevent future losses.