The Treasury Department says about 680,000 homeowners who applied to get their mortgage payments lowered, or about 51 percent, have been disqualified through August. That's up from about 48 percent in July.
The report gives ammunition to critics who say the program has failed to slow the tide of foreclosures, which have battered the housing market and drastically lowered home prices in parts of the country.
About 449,000 borrowers, or 34 percent of the 1.3 million who enrolled in the program, have received permanent loan modifications and are making their payments on time.
