"The banks take this very seriously. They were not elated at having failures. I know they've spent a lot of money and a lot of time trying to correct their processes in a way that will serve the public better, but we're not there yet," said Smith, who was hesitant even to call the report's results "satisfying." He was also reluctant to praise any one bank over another, unwilling to declare, "who is best yet."
(Read More: Rising Rates Scare Borrowers Into Action)
In addition to the 29 servicer test results, Smith also reported receiving 59,586 consumer complaints as well as 797 from mortgage professionals between October and the end of March 2013.
The top consumer complaint was that a single point of contact was not provided or that contact was either difficult to deal with or to reach. The lack of a single servicing agent to work with each customer has led to dual-tracking; that is when one side of the bank is unaware that the other side is working on a loan modification and a foreclosure is completed while the borrower is still working through a mortgage modification.
Dual tracking violations of single point of contact and of timeline standards for loan modifications are also the crux of a lawsuit announced in early May by New York State Attorney General Eric T. Schneiderman against Bank of America and Wells Fargo. Schneiderman jumped the gun on Smith's report, citing 339 violations of the National Mortgage Settlement in New York.
"Wells Fargo and Bank of America have flagrantly violated those obligations, putting hundreds of homeowners across New York at greater risk of foreclosure," Schneiderman said in a statement released May 6.
(Read More: More Evidence Banks Violated Mortgage Pact: NY AG)
Former Bank of America employees, in affidavits filed in a Massachusetts lawsuit last week, claimed the lender paid them bonuses to deny loan modifications, lie to customers and initiate new foreclosures. Bank of America denied the allegations.
Smith had no comment on either lawsuit, saying only, "The single biggest deficit we have in the mortgage business is a deficit of trust."