The Hope Now alliance, a Bush administration-backed mortgage industry group, said Thursday that the industry has performed some form of workout on 2.3 million loans since July 2007. About one-third of those were permanent modifications.

But on Monday, a group of state banking and law enforcement officials released a report that said nearly 80 percent of borrowers with subprime loans were not on track for assistance to avoid foreclosure as of May.

Paul Koches, general counsel of subprime mortgage servicer Ocwen Financial Corp., said a loan modification benefits both the borrower and the lender because losses on foreclosed homes are running at more than $100,000 per property. "It sure beats the alternative," Koches said.

Nevertheless, the level of loan modifications varies dramatically in the industry, according to a Credit Suisse report released this week. Among 18 loan servicers, modification rates among subprime loans made since 2005 ranged from under 2 percent to nearly 18 percent as of August, according to the Credit Suisse report. Ocwen Financial had the third-highest level of loan modifications in the Credit Suisse report.

Still, many borrowers continue to have problems, even after a modification.

Roughly one-third of all loans modified in the third quarter of last year re-defaulted within 10 months, the Credit Suisse report said. However, that rate dropped to 15 percent among loans where interest rates were frozen and not allowed to reset at higher levels.