..the program guidelines… have recently changed in a way that will limit what you describe from happening.

First, current program guidelines. The program currently permits servicers to start trial payment plans on the basis of verbal income information provided by the borrower. Many, if not most, servicers chose this option because it provided immediate payment relief, subject to verification of income and full underwriting. The other option requires borrowers to submit complete documentation for underwriting prior to starting a payment plan.

In the case of trials based on stated income, if the documentation subsequently submitted by the borrower is different, and the person is no longer eligible, they would in fact be reported as delinquent as required by the program.  Note that the income can be too high (specifically, the housing to income ratio is below 31% already), or too low (frequently the case in the case of someone who has lost their job in the interim). In addition, the program required certain other data to be refreshed if aged greater than 90 days, which could also result in not being approved.

So, the scenario you describe does in fact occur. Recently, the Administration changed  the rules to eliminate the stated income option, and all new borrowers will be fully underwritten prior to starting on a plan, so that if they make all payments and submit the final agreements, they are done.The deadline for conversion to the new plan is June 1.

The Treasury guidance that outlines the mandate to move to verified income is public information. I’ve linked to part of it here. Another useful document is the latest FAQ shown on the MakingHomeAffordable.gov site.