The chief monitor of the $25 billion national settlement with the nation's five largest mortgage servicers is getting an earful from homeowners and housing counselors about the slow pace of loan modifications and frustration at not having a single point of contact.

Joseph A. Smith, the former North Carolina banking commissioner who now heads the Office of Mortgage Settlement Oversight, has been touring the West Coast to gauge the servicers' progress by speaking with the folks "on the ground."

Smith has met with housing counselors in Oakland, Calif., toured homes in Watts in Los Angeles, and had lunch in Las Vegas with Nevada's Attorney General Catherine Cortez Masto. What he is hearing is that borrowers are still being denied loan modifications with no explanation, that principal reductions are few and far between, and that servicers are still engaging in the now-barred practice of dual tracking, whereby a home moves to foreclosure even as the borrower is simultaneously pursuing a loan modification.

"It's a needed reality check for me," Smith said of the road show, which will continue next year with stops in Chicago and Florida. "I see spots of light but there is still a lot of dissatisfaction with the loan modification process, and still a lot of stress out there on underwater borrowers."

The settlement, which was finalized in March, was designed to address servicing abuses that led to the robo-signing of foreclosure documents. To date, the five servicers have said that they have provided roughly $26 billion of relief to 309,400 borrowers—or $84,400 per borrower—primarily in the form of short sales, but also through loan modifications, refinancings and forbearance forgiveness.

In an interview in Los Angeles, Smith said that mortgage servicers are being premature in announcing they are close to meeting their settlement obligations.

Last month Bank of America said it expects to meet its terms of the settlement by the end of February—two years ahead of the required deadline—and JPMorgan Chase said it has met its obligations in California and Florida.

But Smith says the top five banks that reached a settlement in February with 49 states and federal regulators—Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo—are not done until he says they're done.

"Not one dollar of credit has been given to anybody. Zero," Smith says.

Housing advocates say there is a gap between the relief borrowers are getting on the ground and what the five servicers agreed to do as part of the settlement. Several borrowers told Smith their servicers had transferred their loans to smaller entities before a critical Oct. 2 deadline for complying with 304 different servicing standards.

Blanca Velasquez, 49, says she tried for a year to get a loan modification and principal reduction because her home in Hacienda Heights, Calif., is now worth $420,000 though the mortgage is $568,000. She told Smith that her loan was transferred to smaller servicer on Sept. 28, just before the Oct. 2 deadline.

One of the standards servicers have to meet, having a single point of contact that is consistent throughout the resolution process, "is something that's going to require a lot more work," Smith said.

"The standards are clear that a single point of contact is required," he said. "We're going to be monitoring this for three years, we're going to be sure the single point of contact is implemented."

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