Both Bank of America and Chase are rushing to show the American public and the Obama administration that they are indeed modifying home loans and helping homeowners change their mortgage terms to produce more affordable payments. This comes after strong criticism from Washington that the banks simply aren’t doing enough to help struggling homeowners keep their homes.

Bank of America (BoA) claims it has modified the home loan terms of over 160,000 borrowers from January 2008 through October 2009. Bank of America points out that it has actually made over 600,000 home loan modifications since January of 2008, though not all of them where through the Making Homes Affordable Modification Program (HAMP). The program has many different components and you can find more details on the HAMP website.

Across all banks it’s estimated that an unexpectedly low 84,000 home loans have actually been permanently modified under HAMP. According to Bank of America’s own numbers they have made modified more home loans than any other bank under HAMP. The administration designed HAMP to help between 3 to 4 million troubled homeowners, but so far only about 650,000 loans have been modified when you add up all the assistance by all US banks.

HAMP states that homeowners must make at least three trial mortgage payments, provide proof of income hardship and provide other information and file more paperwork in order to have their newly modified mortgage terms become permanent. This paperwork and proof of hardship is apparently daunting to homeowners and has actually been considered an obstacle to modifying loans according to some borrowers and bank officials. It simply is not an easy process to follow to get a bank to modify your home loan. Another large bank, Chase, has reported that a high percentage of HAMP trial plans were not continued because the borrowers did not make all three payments or were unable or unwilling to provide the proper documentation and paperwork.

The US Treasure published a report last month which showed that some of the larger banks still have plenty of progress to make in home loan modifications. According to the report Bank of America only modified 14% of the eligle home loans it holds, Citigroup Inc. modified 40% of its eligible home loans and JP Morgan Chase & Co. modified about 32% of the eligible mortgages in its portfolio.

There are many expert opinions on why HAMP is not working as it should, but the one general consensus is simple math: there are too many people who are in home loans that they cannot afford with or without modification. The sagging economy and job losses are also striking the very people who are trying to modify their loans, but there is simply no mortgage modification program available that will help a family with little to no income buy the homes they thought they could afford.