mortgage ratesLarge mortgage servicers have made progress in helping borrowers avoid foreclosure, but problems remain in some areas, particularly on sending notices to homeowners in a timely manner.

That’s according to a report card issued today by Joseph Smith Jr., the independent monitor of the national mortgage settlement reached with five large financial institutions: Bank of America, Chase, Citi, ResCap Parties and Wells Fargo. The report measures each mortgage servicer’s compliance with 304 servicing standards established by the settlement.

Through the settlement, the banks have provided more than $50 billion in relief to more than 620,000 homeowners.

“The good news is that gains have been made,” said Shaun Donovan, secretary of Housing and Urban Development. “The practice of robo-signing — where banks sign off on foreclosures with little or no review — has come to an end. We’ve also confirmed that the five banks have stopped charging distressed borrowers a fee just to process a loan modification request.”

Four of the five mortgage services, however, got failing grades on timely communications with borrowers concerning the status of their mortgages.

“This is unacceptable,” Donovan said.

Banks must correct this issue and other areas where they’re not living up to the settlement’s standards. If they don’t, the federal government — working with state attorneys generals — “will fine them up to $5 million for each failure or haul them back into court,” Donovan said.

“It’s time for them to live up to their end of the deal,” he said.

Attorneys general from four states joined Donovan in a press call about the mortgage settlement monitor’s report card.

North Carolina Attorney General Roy Cooper agreed there’s been “significant improvement in bank behavior, but it’s clear there’s more to do.”

Before this agreement was reached, “bank foreclosures were the Wild West.”

Now there are strict standards, and a sheriff to enforce them, he said.

“We expect the banks to follow the rules of this agreement,” he said.

To do this, banks have “had to bulk up on the back end” of the lending process, hiring more people to handle loan modifications and foreclosures, he said.

Meanwhile, the federal government is negotiating a settlement with additional mortgage servicers, which would apply these new standards to more banks.

“You should expect announcements on that in the coming weeks,” Donovan said