The Obama administration vigorously defended its Home Affordable Modification Program Wednesday, which  faces sharp criticism by Republican lawmakers who want it axed.

Repeatedly saying that the housing market remains fragile,  Treasury Department officials touted the fact that while the 2-year-old program is not meeting its initially much-publicized — and now unrealistic — goal of saving 3 million to 4 million families from foreclosure, the 25,000 to 30,000 families each month who are receiving permanent loan modifications is cause for it to continue.  

“No one is putting forth a better alternative,” said acting Treasury Assistant Secretary Tim Massad on a conference call with reporters shortly before a House Financial Oversight Committee hearing to consider whether to terminate several of the federal government’s foreclosure prevention efforts.

“There are today those who would say we should end those programs,” Massad said. “And they’re basically saying because you haven’t helped enough people, you shouldn’t help more. That doesn’t make sense.”

Since announcement of the program by President Barack Obama in March 2009,  HAMP’s guidelines have repeatedly changed, as has its manner of dealing with mortgage servicers.  Homeowners and housing counselors continue to complain that lenders are losing paperwork, not being responsive and not approving enough modifications.  Neil Barofsky, special inspector general for the Troubled Asset Relief Program, has criticized HAMP’s progress as well, calling its results “anemic” last month.

Nationally since the program’s inception, almost 1.5 million homeowners started trial loan modifications but only 36 percent of those homeowners were in active permanent payment plans in January.

Four bills designed to end the federal foreclosure assistance programs, which in addition to HAMP include the Neighborhood Stabilization Program, the Federal Housing Authority Refinance Program and the Emergency Homeowners Relief Program, have been proposed by House Republicans.

Illinois Rep. Judy Biggert chairs the Insurance, Housing and Community Opportunity Subcommittee. Ill. Rep. Louis Gutierrez, the ranking Democrat on the subcommittee, has said he opposes the bills.

In recent months, Treasury officials have defended HAMP by noting the large number of homeowners who, unable to receive a HAMP modification, are participating in lenders’ in-house programs. As of January, almost 560,000 homeowners who did not qualify for a HAMP trial modification or whose trials were canceled, are working on alternative modifications, Treasury said.

Massad acknowledged Wednesday that the administration initially overestimated the number of homeowners who would qualify for the program. It now stands at 1.4 million. “In a crisis you act quickly, you have to act quickly,” he said. “There was an estimate made and we weren’t sure, frankly, how many people were eligible. We made the best calculations we could at the time, we initiated the program and we’ve learned and improved it.”

In the Chicago area, 7,504 homeowners were participating in trial modifications in January and another 28,125 had received permanent loan modifications, according to the monthly HAMP scorecard released by the Treasury Department Wednesday. The number of permanent modifications begun rose 3 percent from December but as has been the trend, the number of new people beginning trial payment plans continues to slide.