The number of struggling homeowners who were current on permanently reduced mortgage payments under the Treasury's housing rescue program grew to 295,348 in April from 227,922 in March, a Treasury report showed on Monday.

It showed, however, that active trial modifications -- in which borrowers were paying lower monthly payments in an effort to earn permanent status -- had fallen to 637,353 from 780,951 in March.

The report said about 9 percent of 60-day delinquent borrowers who were eligible to participate in the Home Affordable Modification Program had now achieved a permanent modification, up from about 6.7 percent in March. The number of eligible borrowers also declined to 3.275 million in April from 3.399 million in March.

The Treasury has stated its goal is to permanently slash mortgage payments for 3 million to 4 million borrowers by the end of 2012, but mortgage industry experts say the number of foreclosures expected in the next two years will far exceed that amount.

The number of mortgage modifications canceled during April also spiked sharply higher, to 277,640 from 155,173 in March. Common causes of cancellations include missed payments or incomplete and unverifiable documentation. The program had extended many trial modifications started last year for several months, and the Treasury said these were being resolved.

In order to comply with new Treasury guidelines that take effect on June 1, servicers in March began collecting upfront documentation from borrowers prior to initiating new trial modifications.

(Reporting by David Lawder; Editing by Padraic Cassidy)

Mortgage