The top five mortgage lenders say they have offered $45.8 billion in consumer relief to distressed borrowers under the national mortgage settlement. But the banks are still drawing fire from consumer advocates who say they need to be doing more principal write-downs and loan modifications to help keep borrowers in their homes.

A chief criticism of the $25 billion settlement has been that banks get credit for completing short sales — which result in borrowers giving up the property — when the goal is to consumers keep their homes. To date, more than twice as many distressed borrowers have sold their homes in short sales than have received principal reductions, according to the third progress report released Thursday by the settlement's monitor, Joseph A. Smith.

"The consumer relief numbers are upside-down and reflect priorities that are exactly the opposite of the goals of the settlement," says Dan Petegorsky, the lead researcher for the Campaign for a Fair Settlement, a watchdog advocacy group monitoring the settlement's progress.

It seems unlikely, too, that banks will be offering widespread principal reductions in the months ahead because all say they are close to fulfilling their obligations under the settlement reached last year with 49 state attorneys general and federal banking regulators.

Bank of America, for example, said Thursday that it said it is "on track" to meet its total $8.6 billion financial obligation by the end of the first quarter.

It said 47,000 customers had been approved for more than $7 billion in first-lien modifications or principal forgiveness while 144,000 customers have had home equity loans or lines of credit modified or extinguished, totaling more than $9.8 billion in reduced principal.

That compares to 99,000 borrowers approved for short sales that provided $11.8 billion in relief from unpaid principal balances on the loans.

"The determination of credits earned toward the settlement obligations will be based on the types of relief and the amount of relief completed from those offers and will be made by the federal monitor," B of A said in a press release.

But Smith said in an interview that banks might not be as close to fulfilling their obligations as they think. Banks will only get credit for second liens that "benefit the borrower," he said, and are limited in the credit they can receive for short sales. For instance, they will not get any credit in states like California where they already are barred from pursuing a deficiency judgment against the borrower.

The settlement signed in March 2012 was designed to address servicing abuses that led to the robo-signing of foreclosure documents. It requires the five largest servicers — Bank of America (BAC), Citigroup (NYSE: C), JPMorgan Chase (JPM), Wells Fargo (WFC) and Ally Financial — to provide a minimum of $17 billion in direct consumer relief and $3 billion refinancings of underwater borrowers. The remaining $5 billion was paid to regulators.

Because the top mortgage servicers are self-reporting, consumer advocates say there is no way to determine if their numbers are accurate and who is getting the relief.

Smith said the amounts provided by have not been subject to a detailed review and have not yet been scored toward each bank's total obligation.

So far, Smith has determined that only Ally, formerly known as GMAC, fulfilled its requirements under the settlement.

But the numbers show how complicated it is to determine whether servicers are meeting their requirements.

Though Ally said it provide $556 million in consumer relief, it ultimately only received credit for $257 million. That's because the total dollar amount of relief provided by each servicer does not actually match their total obligations. Rather, servicers get $1 dollar in credit for each $1 of principal forgiveness, but only 45 cents of credit for each $1 in principal forgiven on a short sale, and only 20 cents of if the loan is owned by an investor.

Moreover, though the bulk of consumer relief is supposed to come in the form of first- and second-lien principal forgiveness, banks have relied heavily on short sales. All told the top five banks have offered $19.5 billion in short sale relief since March 2012, compared with $7.4 billion in first-lien modifications and principal reductions.

Underscoring these problems is that complaints from distressed borrowers and active-duty military personnel are on the rise.

Roughly 5,700 consumers have filed complaints with Smith's office, though the average number jumped to 830 complaints a month since November, up from 550 complaints per month from March through October of last year.

The complaints dealt primarily with borrowers' frustration and confusion about the loan modification process, the lack of adequate and timely follow-up by servicing personnel, inconsistent explanations and a lack of knowledge on the part of servicers and continued requirements that borrowers submit documentation multiple times.

"It's still very hard to figure out what's going on on the ground level," says Mark Ladov, a lawyer at the Brennan Center for Justice at New York University's Law School. "We're certainly not seeing any evidence that the servicers are systematically changing the way they do business, and that's reflected in the numbers."

Smith agreed that more needs to be done.

"We're still working our way through the aftermath of the meltdown and what we're hearing is that distressed borrowers are still having difficulty understanding the rules of the road to get modifications and a consistent point of contact," he said Thursday. "It's clear to me we have to concentrate on that issue and part of it is going to be rigorous enforcement."

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