The Department of the Treasury released its sixth report card on how mortgage lenders are doing modifying loans for eligible homeowners under the government’s Making Home Affordable program (see the first, second, third, fourth, and fifth report cards).

An important figure to watch in the HAMP program is the percent of trial modifications that have become permanent. The HAMP program starts out participants in three-to five-month trial modifications, and if they submit all the necessary paperwork and make payments on time, they are supposed to be entered into a permanent modification. Looking at the percent of trials that have become permanent tells a story of how likely HAMP is to make a long-term dent in foreclosure activity. Treasury started reporting on permanent modifications by servicer in the November report card, and this month, they released numbers on permanent modifications by state and metropolitan area.

In the Chicagoland Metropolitan Statistical Area, 44,942 trial and permanent modifications have started, up 24 percent from 36,208 last month. In contrast, national trial and permanent modifications increased only 17 percent from November to December. However, the Chicago metro area is lagging behind the national average in converting trial to permanent modifications. As of December, 7.8% of trial modifications have become permanent nationally, while 7% of trial modifications have become permanent in Chicago. Of the top ten metropolitan areas with the most HAMP activity, Chicago is number nine in converting trial to permanent modifications (see chart below).

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