About 97,000 homeowners in the government’s mortgage modification program have been stuck in a trial period for over six months. Most of them, about 60,000, have their mortgages with a single mortgage servicer, JPMorgan Chase.

Trial periods are designed to last only three months, after which mortgage servicers are supposed to either give homeowners a permanent modification or drop them from the program. According to a ProPublica analysis, about 475,000 homeowners have been in a trial modification for longer than three months.

While the Treasury Department has so far allowed servicers to stretch the trials without repercussions, the government issued little-noticed guidelines in late December, warning that lenience will end at the end of this month. Servicers will have to clear out their backlogs, and those that don’t abide by the guidelines could face "financial penalties," said a Treasury spokeswoman. But Treasury has been vague on how big those penalties will be.

Although homeowners in the trial modifications have had the benefit of seeing their monthly payments drop (by an average of $522), there are adverse consequences when a trial drags on. A homeowner’s credit score can take a hit. Because a homeowner is not making a full payment, the balance of the mortgage grows during the trial period, putting someone who was behind when the trial began even further behind if it fails. The homeowner can be in worse shape if the modification fails since she’s been making the trial payments instead of saving for the possibility of foreclosure. And last but certainly not least, those homeowners suffer the stress and fear of not knowing whether they’ll be able to keep their homes.

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Some homeowners have been in limbo for as long as 10 months – since the launch of the program. Recently, we at ProPublica asked readers to help us find who’d been in a trial period for the longest time. We heard from hundreds of frustrated homeowners, many who’d begun trials last summer. Among them were two — Marlene Colon of Tinton Falls, N.J., and Deb Franklin of Airville, Pa. – who had begun trials last May and were still waiting. Chase Home Finance, a subsidiary of JPMorgan Chase, serviced both their mortgages.

Since the first servicers signed up last April, about 1 million homeowners have been put into trial loan mods. Only 116,297 have emerged with a lasting modification. That number will undoubtedly go up next month, though given the scale of the foreclosure crisis, it will remain disappointingly low. However, if the servicers succeed in reducing their backlogs, an even larger number of homeowners might find themselves dropped from the program and facing the possibility of foreclosure.

Colon, the New Jersey homeowner, and her fiancé sought a modification from Chase last spring after she lost her job and ongoing health issues prevented her from working elsewhere. Although she was glad to see her payment drop from about $1,600 per month to $965, she said it has been a struggle to get any answers since then. "I think they do it to wear us down so we throw our hands up in the air and say we give up," she said.

She and her fiancé were current on their payments when the trial began and had a high credit score, she said, but they’ve since seen their credit card limits cut. Treasury instructed servicers to report the trial payments as a reduced payment plan to the credit reporting agencies, which can result in a significant lowering of credit scores.

It’s unclear when she’ll get a final answer. Recently, Chase asked for updated copies of her fiancé’s pay stubs, she said, which she says she promptly sent in.

Christine Holevas, a spokeswoman with Chase, said in a statement that Colon’s case was "under review," but did not give more detail.

As for the tens of thousands of other homeowners in limbo, Holevas said that Chase is "working through its inventory according to U.S. Treasury Department guidelines" and "trying to help struggling borrowers stay in their homes whenever we can."

She emphasized that "we need the homeowners to get us all the required documents." As ProPublica has reported, servicers (not just Chase) have a poor track record of handling documents. Homeowners in the program routinely complain about servicers losing paperwork and asking again and again for the same documents.

Colon says her problem has always been getting information from Chase, not the other way around. "I can’t imagine that someone who’s in a bind wouldn’t comply," she said. "We’ve done everything that they’ve asked of us."

No other servicer has near as many homeowners in limbo as Chase. A smaller servicer, Saxon Mortgage Services, a subsidiary of Morgan Stanley, has a similar proportion of lingering trial mods – about one-third of its homeowners in trials have been in one for more than six months. But it services relatively few mortgages over all, and has only about 13,000 mortgages in trial modifications. A spokeswoman said that Saxon had "launched a number of proactive programs to work with borrowers to collect all of the documentation required." Bank of America, by far the largest servicer, has about 12,000 homeowners in a similar position. A spokesman said that the bank was gaining "momentum" in providing permanent modifications. (You can see how all the servicers match up in our interactive chart.)

A Surge in Denials?

Banks and servicers have not only been slow to approve homeowners for permanent modifications, there have also been surprisingly few homeowners dropped from the program – only about 61,481 as of January. Borrowers can be dropped for missing payments, failing to send in documents or simply proving ineligible.

Part of the reason for the trial backlog are the Treasury guidelines. In late December, Treasury initiated a "review period" during which servicers were prohibited from dropping homeowners from the program if they were still in the home. Servicers were supposed to take the opportunity to let homeowners know this was their last chance to send in missing documents or payments. The grace period extended through January.

That means the number of denials should surge this month, which is why many observers, like the blog Calculated Risk, think February’s numbers will be particularly revealing of the modification program’s success.

About two-thirds of homeowners in trials are current on their payments, according to Treasury. That means that roughly 275,000 homeowners are not. However, that doesn’t necessarily mean they will all be dropped from the program – homeowners who stopped making the trial payments after the expiration of the three-month trial period are still eligible for a permanent modification.

Treasury is also pressuring the servicers to make final decisions about homeowners in cases where no documents or payments are said to be missing. About the same time that Treasury launched the review period, it also instructed servicers that they must make a determination about such homeowners by the end of February.

"We have been working very closely with servicers and are confident that they will meet the February deadline for making determinations on borrowers in the trial phase," said a Treasury spokeswoman.

Estimated Trials Lasting Longer Than Six Months: Top Four Servicers

Source: Treasury data, ProPublica analysis

Have you applied for a loan modification under the Obama administration’s Making Home Affordable program? Are you thinking about it? If so, we at ProPublica want to hear your story.