Banks are stepping up modifications of mortgages for struggling borrowers in an effort to help those who don't qualify for the government's Home Affordable Modification Program and the broader housing market. However, while almost 11% of borrowers in HAMP redefault on their adjusted loans, more than 22% of those in private mortgage modifications redefault. Regulators say the difference can be attributed to the gap in how much borrowers' payments are reduced. HAMP reduces monthly payments by an average of more than $600, while bank modifications result in reductions of about $307.

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