Photo: Bank of America.

The Office of the Special Inspector General for the Troubled Asset Relief Program submitted its quarterly report to congress a few days ago, a hefty tome of more than 530 pages. Created during the financial crisis, SIGTARP is charged with tracking the use of government TARP funds, and rooting out any fraud that occurs within programs that use TARP money.

Not surprisingly, big banks are mentioned time and again in the report, and the name of Bank of America (BAC 0.07%) comes up fairly often. Scarcely a week goes by where the big bank isn't in the headlines in regard to one or more of many pending lawsuits or settlements involving crummy mortgages. Many of those problems stemmed from actions of years ago, however, such as the toxic loans Countrywide cranked out in the pre-crisis years.

Every now and then, though, something reminds us that the problems with Bank of America and its mortgage business aren't entirely in the past -- and the SIGTARP report fits that criterion very well.

Servicing troubles still abound
Bank of America, as a signatory to the National Mortgage Settlement, is under pressure from regulators to clean up its mortgage servicing problems. In that situation, it's not alone: Peers Citigroup, JPMorgan Chase, and Wells Fargo are also part of the settlement and have their own issues to resolve when it comes to dealing with troubled mortgages.

But each time progress on mortgage servicing is gauged, Bank of America is found wanting. When settlement administrator Joseph A. Smith published his report on how the big banks were doing in their attempts to rectify shoddy servicing practices, B of A and JPMorgan were found to have made less progress than Citi and Wells. This is the case, again, as the SIGTARP report notes that complaints to the office's hotline are proportionately higher for Bank of America and JPMorgan. Gripes cluster around issues related to foreclosures and short sales -- and home loan modifications.

The latter problem has been dogging Bank of America for some time, and a court case last summer in Boston highlighted allegations that the bank encouraged employees to lie to homeowners looking to modify troubled loans. Outrage over the charges of homeowner abuse led California lawmaker Maxine Waters to ask for an investigation into how B of A was able to collect nearly $1 billion in government loan modification incentives while all these alleged shenanigans were going on.

As if all this wasn't damaging enough to Bank of America's reputation, a J.D. Power survey on mortgage servicing came out around the same time as the Boston courtroom drama was unfolding -- showing that, once again, B of A lagged its peers in customer satisfaction in the mortgage business.

Even the loans that make it through B of A's modification process are often not up to snuff. According to SIGTARP, Bank of America's redefault rate on modified loans is also much worse than its peers -- 31% for B of A, compared with 24% for Citi and Wells, and only 23% for JPMorgan.

Bank of America still has a long way to go
While B of A seems anxious to put the mortgage mess behind it, this report shows that not a lot of progress is being made. The SIGTARP document also makes mention of the so-called "Hustle" case, in which the bank was found to have knowingly pushed through dodgy loans to make a quick buck.

Recently, Manhattan U.S. Attorney Preet Bharara filed paperwork with the court encouraging a maximum penalty of $2.1 billion to be levied on B of A. The bank is balking, of course, and claims that the Hustle was perpetrated by Countrywide for only a few months -- and stopped before being acquired by Bank of America. SIGTARP, on the other hand, notes that the scheme lasted from 2007 to 2009, and that Bank of America willingly participated.

Clearly, B of A is on the wrong side of the argument here and is still unable to admit to the damage caused by its dicey mortgage practices. Until it can do so -- and take strong action to rectify the problems it has caused -- the bank won't be able to regain the public's trust, making its efforts to rebuild its mortgage business all the more difficult.