The number of Chicago-area homeowners who received permanent loan modifications under the federal government’s program rose 17 percent in May, but there continues to be a dramatic slowdown in the ability of local consumers to qualify for trial payment plans.

Treasury Department officials said 17,428 area homeowners have received a permanent modification since the government’s Home Affordable Modification Program that was introduced last year, compared with 14,890 homeowners in April. At the same time, the number of homeowners in active trial modifications slumped by more than 26 percent in May, to 23,640.

Nationally, the report shows that for the eight largest servicers, 48.9 percent of homeowners who were unable to qualify for a permanent modification found an alternative to foreclosure. In fact, among the largest servicers, only 7 percent of cancelled trial modifications ended up in foreclosure.
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