Half a million people are now in trial modifications under the Obama administration's mortgage rescue plan, but getting them permanent help is proving to be difficult.  The foreclosure prevention plan, which reduces eligible borrowers' monthly payments to no more than 31 percent of their pre-tax income, requires homeowners to make three on-time monthly payments before they can receive a permanent modification.  Loan servicers use the trial period to verify borrowers' income and ascertain whether they can handle the reduced payments.  

But servicers say they are having a tough time collecting the necessary documents to determine whether troubled borrowers should receive permanent adjustments. They contend that some homeowners aren't sending in their tax returns, bank statements and pay stubs. Borrowers, on the other hand, complain that their paperwork is being lost.
 
The Obama administration recently made several changes to the program to give the transactions more time and streamline the plan.  Last month, it extended the trial period by two months to give servicers more time to collect the documents. And last week, it announced that servicers could automatically move qualified borrowers into permanent modifications without their signatures.  The Treasury Department said these moves should make it easier for qualified borrowers to get permanent modifications, according to a spokeswoman. Officials are discussing ways to make it even easier, she said, including allowing servicers to access tax records directly from the Internal Revenue Service.