Under the Obama program to reduce foreclosures, fewer than 35,000 South Floridians have had their mortgages modified, less than 5 percent of those who qualify for help.

Figures from a U.S. Treasury Department report this week offer little good news for the hundreds of thousands of Florida homeowners who are behind on their mortgage payments and seeking help from their lenders.

Banks and companies that service home loans are moving more slowly to renegotiate loans in Florida through the Making Home Affordable program than in the rest of the nation. Nationwide, 24 percent of the 3.3 million troubled home loans have been modified, the Treasury Department said. In Florida, the rate was 13.5 percent through November.

The Treasury report offered the first look into modifications at the local level. The Miami metro area, including Miami, Fort Lauderdale and Pompano Beach, ranks No. 4 among large cities with 34,668 loans modified. That represents 4.8 percent of eligible loans.

``That number seems surprisingly low,'' said Rashmi Airan-Pace, a Coral Gables-based real estate attorney who does loan modifications and foreclosure defense. Airan-Pace said her firm had done about 500 trial modifications over the last six months.

Borrowers who don't qualify for the Obama plan are sometimes offered other loan modification programs, which could partially explain the exceptionally low numbers.

Airan-Pace said borrowers in South Florida may be shunning modifications because most don't offer a reduction in their loan's principal balance. Others may be unable to re-qualify once trial modifications expire.

Also, with home sales having picked up considerably in recent months, she also said lenders were moving more swiftly with foreclosures because the likelihood of selling the properties more quickly had improved.

Modifications under the Making Home Affordable Program are reducing monthly payments by an average of $550 a month, the Treasury Department said.

In a loan modification, the lender typically agrees to cut the interest rate to make the loan more affordable for a limited time to help borrowers who have lost jobs or suffered from the economy's downturn.

AMBITIOUS GOAL

The Making Home Affordable program was launched in February with a goal of helping 3 million to 4 million homeowners to get lower mortgage payments.

One out of five loans eligible for modification under the Making Home Affordable Program is in Florida. The state is the nation's second busiest for loan modifications under the Obama program. Florida also had the nation's second highest foreclosure rate in November. In the third quarter, more than 441,000 or almost 13 percent of the state's mortgages were in foreclosure.

Few who get loan modifications hang onto their new deals under the Obama program. Nationwide, of the 728,408 loans modified, only 31,382 have become permanent.

The problem: Homeowners have to make timely payments and show that they still qualify for the loan after a three-month trial period. Banks say few homeowners make it over both hurdles.

Even if they are making payments on time, about half do not provide the necessary paperwork to make the loan permanent, according to a statement from JP Morgan Chase, a major lender in Florida.

``It has been a struggle,'' said Charlie Scharf, head of Retail Financial Services at Chase.

A spokesman for Wells Fargo said the lender contacts borrowers 20 times to ask for documents and yet only 40 percent of the trial loans with current payments have their paperwork in order.

Homeowners say the real problem is that lenders are disorganized and difficult to work with.

``I have submitted all the papers three times. I've been going through hell, with a promised modification and then the bank said no, really I don't qualify,'' said Claudia LeCompte of Boynton Beach. She said she has been seeking a loan modification since January.

Earlier this week, after an inquiry from the Sun Sentinel, her loan servicer HomEq told LeCompte that she will get a trial modification.

POOR COMMUNICATION

``There is such a grand lack of communication between servicers and their clients and their legal departments and even within their own branches,'' said Alexander Fernandez, director of homeownership preservation at Neighborhood Housing Services of South Florida, which counsels troubled borrowers. ``Also, a lot of servicers don't have structures'' to handle the crush of borrowers.

Major lenders Chase, Bank of America and Wells Fargo say they are restructuring loans at a fast clip through Making Home Affordable and other programs. The three major banks issued press releases this week saying they have collectively modified more than 1.3 million home loans nationwide.

But the Treasury Department is pressuring lenders to do more. It cannot force banks or servicers to restructure loans because modifications are voluntary.

Miami Herald business writer Monica Hatcher contributed to this report.