A little over five months after the inking of the foreclosure fraud settlement, and around three months since a federal judge blessed it and allowed it to go forward, people have begun to wonder whether the signature piece, the money pledged toward “credits” for a variety of actions, including principal reduction, has gotten off the ground. I have heard scattered but haphazard reports of some principal reductions, without much rhyme or reason as to the beneficiary. But for the most part, this Orlando Sentinel article gets the confusion and dismay right:

About 1,000 Floridians have filed complaints in recent months against the top lenders who pledged earlier this year to work with “underwater” homeowners as part of a national legal settlement of unscrupulous lending practices.

A multistate deal hatched by state and federal leaders in February was supposed to force the country’s five largest lenders to lower interest rates, reduce principal or even offer cash to struggling mortgage customers.

But the fine print has left many customers of those lending giants frustrated. The breakdown of the Florida complaints filed against the five lenders who participated in the settlement: Bank of America, 39 percent; Wells Fargo, 28 percent; JPMorgan Chase, 20 percent; Citi, 9 percent; and Ally/GMAC, 4 percent, according to records supplied to the Orlando Sentinel by the Florida Attorney General’s Office.

Remember that this is happening in the first year, when there are incentives for principal reductions in that time period that reduce the banks’ liabilities even more. Yet they’re still dragging their feet.

Simply put, people are wondering who qualifies for the principal reduction and refinancing in the settlement, how to establish those benefits, and even who to contact to get the process started. Some banks, like Bank of America, have delivered their offers to the borrowers, rather than the other way around. There’s an enforcement monitor at the Office of Mortgage Settlement Oversight, but they cannot intervene in any individual case. They can only monitor and enforce compliance on the five banks in the settlement at a global level. And the monitor starts from periodic reports written by the banks themselves. The monitor can assist a borrower through directing them to the proper organization for help, but can really go no further.

And these are the predictable consequences. In Florida, the Attorney General’s office is simply referring complaints back to the banks who are the source of the complaints in the first place. There’s no actual effort to intervene on behalf of homeowners already ravaged by this crisis, now getting potentially screwed in trying to collect on the penalty for the abuse. And of course, the penalties themselves are part of the problem, as they are weak and easily gamed by the banks.

In a related development, Walnut Place, the investors who held up a separate settlement between Bank of America and mortgage-backed securities purchasers over the inadequacy of the deal, just dropped their objections. So it’s likely we’ll see BofA wrap up their settlement over MBS claims, which will spur copycat settlements throughout the industry. The banks are reducing their obligations, but homeowners continue to get the shaft.