According to the U. S. Tresuary, 281,000 of 1.2 million homeowners in trial status had dropped out of the Home Affordable Modification Program.

The Wall Street Journal reported on Monday that the program starts homeowners out with loan modifications set on a three-month trial basis. If homeowners manage to keep up with their modified loans for three months, their lower payments are made permanent.

The Treasury Department has said that in the program that has been chastised for not producing the promised results, 295,000 homeowners had been given permanent modifications by the end of April.

It was however reported, many cannot keep up with payments, fail to provide the necessary documentation or opt out because they owe more on the mortgage than the house is worth.

The report further noted that the number of homeowners in trial status dropped in the past month, down 18 percent to 637,000. Some of those are participants who transferred to permanent status. In April, the number with permanently modified loans rose 30 percent over the previous month. (With inputs from Agencies)