A Treasury official added that the agency had approved a methodology that included cancelled modifications, but Fannie Mae's coding error led to those mods not being included in their calculation of re-default rates.
Without knowing the reasons that servicers canceled HAMP modifications and the features of the proprietary modifications, it is difficult to know whether homeowners are being helped or hurt.
In addition to the 529,000 trial and permanent modifications that have been canceled, 166,000 active modifications in the temporary trial phase were initiated at least six months ago.
According to data released last week by Treasury, there are 466,708 active permanent modifications, compared with more than 700,000 modifications canceled.
Fewer than 600,000 homeowners are currently in so-called "permanent" five-year modifications, while more than 800,000 have had their modifications canceled.
"They are making payments but remaining in limbo or, worse, having their modifications canceled for lack of paperwork".
More borrowers have had their modifications canceled than are still in the program.
The program has fallen far short of expectations, and more borrowers have had their modifications canceled than remain in the program.
President Obama said in 2009 that HAMP would modify mortgages for 3 to 4 million homeowners, but so far just 735,464 homeowners have had their loans permanently modified, while more than 900,000 have had their modifications canceled.
While millions say they need help avoiding foreclosure and many struggling households applied, data released Friday showed the dropout rate from the Making Home Affordable Program was very high: 96,000 trial modifications were canceled by lenders in July.
