Six large U.S. banks could pocket nearly $10 billion in federal subsidies if they modify troubled home loans and are able to save homeowners from foreclosure, the Treasury Department said on Wednesday.

The mortgage specialty arms of Citigroup , JPMorgan Chase and Wells Fargo & Co. would each earn over $2 billion for modifications that have long-lasting success, according to the Treasury's formula.

The money is available through a $50 billion program to encourage mortgage servicers to ease the terms on troubled loans. Many more mortgage servicers will be eligible for the subsidies, the Treasury said.

(Reporting by Patrick Rucker; Editing by Chizu Nomiyama)

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