PHOENIX -- Months after President Barack Obama came to Phoenix to announce his plans to fix the foreclosure crisis, some experts and homeowners say a key component of the program is not working.

"From the consumer's point, it's a failure,” said Kevin Hardin, Thomson Conant Mortgage Mediation Group Director.

Since the program was announced in February, Hardin’s group has worked to secure government loan modifications through the Home Affordable Modification Program for about 100 clients.

“We've not been able to secure a permanent modification for any of them,” Hardin said.

That includes Sun City residents Al and Judy Reznik, who have been waiting since May to find out if the government will give modify their loan mortgage loan.

“We are in absolute limbo. We don't know what’s going to happen or what we're supposed to do,” said Judy Reznik.

She and her husband struggle to scrape together their temporarily lowered mortgage payment.

They said they will have to foreclose on their retirement home and rent an apartment, if they do not receive a permanent modification before the end of the year.

“It's terrible,” Judy said, “Because I am sitting here and saying, ‘Should I start packing my stuff to move? Should I spend the money to put in another bookshelf because I'm staying?'

According to the most recent report released by the Congressional Oversight Panel, which oversees HAMP, only 1,711 homeowners had received permanent modifications through HAMP.

The report said 362,348 homeowners were in trial modifications, which means only 1.26 percent of homeowners who meet basic eligibility requirements receive long-term loan modifications.

Hardin said the government program fails to give banks financial incentives to modify loans and to modify them quickly.

“In the scheme of things, foreclosures are big business,” he said. “The government did not fully understand how mortgage loans are securitized. They did not understand and do a true economic analysis to find out where those incentives needed to be to motivate a servicer to say ‘No. We would rather do modification than to do a foreclosure.'”

A Treasury Department spokesperson said efforts are being made to streamline the application process for homeowners.

For example, homeowners now only have to fill out one form to apply for HAMP and documents can now be submitted electronically.

However, the COP report found the problems with the program run deeper.

It said without changes, “... the result for many homeowners could be that foreclosure is delayed, not avoided.”