"In New York City, where 20,000 homeowners faced foreclosure this year, a recent study by the Center for NYC Neighborhoods found that lenders have offered new or trial mortgages to just 3 percent of the homeowners who have sought help," according to a front-page article in today's edition of The New York Times by Michael Powell.

"Ten months ago President Obama announced a $75 billion program to keep as many as four million Americans in their homes by persuading banks to renegotiate their mortgages. Lenders have accepted more than one million applications and cut three-month trial deals with 759,000 homeowners. But they have converted just 31,000 of those to the permanent new mortgages that are the plan's goal," the article noted.

Big mortgage companies - servicers, in the parlance of the industry - stand at the heart of this program and many that have agreed to participate are subsidiaries of the nation's largest banks and they say their performance is improving, according to the article.

"But a drove of critics, including homeowners, nonprofit loan counselors, legal services lawyers and court officials, say these companies are also at the heart of the problem. Servicers, they say, pile delay upon delay, and too often steer homeowners into new mortgages with onerous terms. Some companies have insisted that homeowners waive their right to sue before getting a new mortgage, even though the Obama plan prohibits such demands," the article said.

New York State lawmakers, like their counterparts in a few other states and cities, have tried to slow the headlong hurtle toward foreclosure by requiring lenders to negotiate with troubled borrowers in court but the article said that Leonard N. Florio, a court-appointed referee, who oversees such sessions in Queens, said he has "yet to see an attorney for a servicer cut a deal." he said. "Update this, update that. I mean, what's the holdup?" he asked.

Loan servicers argue that many homeowners cannot show proof of income, and fail to make payments even on modified mortgages. "And millions are in bigger trouble than the public realizes, burdened with monthly payments so exorbitant that even a reduced mortgage payment will not save their home," the article maintained.

The Obama program pays the servicing companies $1,000 for each loan modified, and another $1,000 per year for three more years if the borrower avoids foreclosure. The companies also make large sums charging late and legal fees on overdue mortgage payments, and sometimes it is cheaper to foreclose than to cut the mortgage payment, according to the article.

Housing counselors dial a dozen times just to get a servicer on the phone, the article said: "It's a constant Catch-22: They never give you their name," said Gerald Carter, a counselor with the Parodneck Foundation in New York City, which receives city and state money to advise homeowners.

Last month, the article continued, "the Legal Aid Society of New York sued the federal government and a mortgage servicer, Aurora Loan Services, on behalf of four Queens homeowners. Aurora, which has a $116 billion loan portfolio, was a subsidiary of Lehman Brothers before that firm went bankrupt; it offered loans with interest rates just a bit lower than subprime rates, which are typically a few percentage points higher than rates on conventional mortgages. The lawsuit charges that Aurora, and by implication many other servicers, systematically denied homeowners access to the federal rescue program. And, the lawsuit asserts, the Obama plan provides far too few safeguards for homeowners."

Asked to respond, the article said an Aurora spokeswoman e-mailed a statement saying the company tries to prevent foreclosure for its customers. Phyllis Caldwell, chief of the Treasury Department's Home Ownership Preservation Office, told The Times she is not inclined toward tough talk about servicers, perhaps because the Obama plan, which she oversees, lacks enforcement teeth.