Moody's Investor Service has found that only 50% of temporary loan modifcations have been made permanent loan modifications. The report also showed that some permanent loan modifications had been cancelled.

According to Moody, the biggest factors in the low conversion rate is failure to provide documentation to the lender and negative equity in the home. The payments offered to homeowners are not motivating enough for most homeowners to remain in their home while it is severely upside down.

Most critics have called HAMP a failure. There is a high percentage of default on the permanent loan modifications within the first six months. With high unemployment, severe negative equity, and less to be desired loan modifications, most critics don't expect it to get any better. As a matter of fact, most think the loan modification craze is running its course now that the Administration has focused on short sales as an alternative to foreclosure.

On April 5th, 2010 the HAFA program was rolled out but is voluntary by banks to participate. HAFA is a streamlined short sale process. Due to restrictions and qualification standards most homeowners will find they don't qualify for this program either.