BofA's gov't mortgage modifications slow in July

* Bank completed 4,300 gov't-backed mortgage mods

* Pipeline of borrowers under gov't program down to 85k

CHARLOTTE, N.C. Aug 18 (Reuters) - Bank of America Corp (BAC.N) said on Wednesday that the number of homeowners entering the U.S. government's primary program to forestall foreclosures was slowing under tighter guidelines recently implemented by the U.S. Treasury.

In July, the Charlotte, North Carolina-based lender completed 4,300 permanent mortgage modifications under the U.S. government's Home Affordable Modification Program, or HAMP.

Since January, the bank has completed 76,300 modifications under the plan, but the pace has slowed dramatically in recent months as the U.S. Treasury in April established new documentation requirements for borrowers entering the program.

"When a customer is found to be ineligible for HAMP or falls out of a trial modification, we consider an alternative home retention program, and if no viable solution is available, a dignified exit from homeownership," said Rebecca Mairone, default servicing executive for Bank of America Home Loans.

Under the government's program, banks receive an incentive payout for amending a mortgage's payment terms to prevent a foreclosure for qualifying borrowers.

Homeowners enter the program under a three-month trial payment period, and can be converted to a permanent loan modification afterward.

But the program came under fire earlier this year from critics who argued that it did not adequately oversee which borrowers qualified and whether they could continue to repay under their new home loan terms.

In April, Treasury required banks to obtain full documentation of a borrower's financial information, rather than accepting it verbally, and conduct a full underwriting process before allowing a trial modification to begin.

In part due to the new rules, the pipeline of borrowers in a trial modification has shrunk to 85,000 in July, Bank of America said.

The decline has been partly offset by a rise in modifications done by the Bank of America's own programs.

The bank said nearly 100,000 customers had received some type of home loan change through its own programs as of July.

That figure is up roughly 12,000 from June.

Since January 2008, Bank of America has modified 665,000 mortgages, including 590,000 through proprietary programs. (Reporting by Joe Rauch; Editing by Lisa Von Ahn)