The Treasury Department recently released a report showing that, as of June 30, more than 1 million temporary and permanent loan modifications have failed since the start of the Home Affordable Modification Program (HAMP) took effect three years ago. According to the report, had the larger servicers were better-equipped to handle the crushing caseload of applications, it could have helped 800,000 homeowners.

The report was part of a study from researchers at the Federal Reserve Bank at Chicago, the Office of the Comptroller of the Currency, the Columbia Business School and Ohio State University. Research found that, even in a best-case scenario, it would only help — at the most — between 1 million and 1.3 million households, not the 3-4 million the Obama administration expected to help. This was attributed to the large servicers only offering half as many loan modifications as the other companies. The more successful and more active servicers were able to help homeowners more effectively because they had trained staff and programs in place before HAMP took effect.

The authors wrote that some of the servicers may have placed more promising homeowners into HAMP intentionally so they could receive financial incentives if they were successful in modifying the loan. Further, HAMP did not make any positive impacts in the neighborhoods where the modifications were made, in terms of home prices, auto sales, the local unemployment rate and credit card and auto payment delinquencies.