Troubled homeowners who are making lower mortgage payments on a trial basis are at risk of being kicked out of President Obama's foreclosure-prevention program as temporary review period have until January 31, 2010.

Mortgage servicers have until the end of the month to review all trial modifications that have been underway for several months under the Home Affordable Modification Program (HAMP). A new guideline will be issued next week.

During the review period, servicers must establish whether borrowers have made all their payments and have completed and passed all the necessary paperwork. Those who have not will receive letters giving them 30 days to comply.

The objective of the review is to clear up the backlog of borrowers stuck in trial modifications and have been waiting for about seven months to know if they qualify for a permanent modification on their mortgage.

This directive has some implications as seen by some bank regulators, as paperwork has proved to be a major stumbling block for the president's foreclosure-prevention program. Homeowners complain that their mortgage servicers lose the documents they send while financial institutions argue that borrowers have not been sending in their paperwork.

Aware of the problem, Treasury officials said that they will issue a new guideline to servicers next week which intends to hasten the conversion of borrowers in the trial mode to permanent modification. It may also lighten the documentation requirements.

Under fire for the low number of people receiving long-term help, the Treasury Department in late November increased the pressure on servicers to convert borrowers to permanent modifications.

Some 66,500 people have received permanent adjustments, with another 787,200 homeowners in trial modifications.

Overall, about three-quarters of the borrowers are making their payments on time, according to the Treasury Department.

Treasury officials already lightened the documentation requirements in the fall in hopes of speeding up the conversion process. But more needs to be done like the implementation of a standardized documentation form and the creation of a Web portal that will allow homeowners to track the receipt of the paperwork, he said. Also, it should allow servicers more flexibility in accepting alternative documents.