In the last few months, there has been more and more indications that banks, investors and regulators would finally embrace loan modifications that reduce how much borrowers owe. It hasn’t happened yet. Edward DeMarco, who is the head of the government agency that oversees Fannie Mae and Freddie Mac, says he is still against so-called principal reductions.

And what about the only real effort to push banks to offer modifications that cut loan amounts – the $25 billion 49 state settlement struck with the nation’s largest banks tied to the robo-signing scandal? Well, the guy tasked with overseeing that settlement says borrowers aren’t getting what they were promised there either, at least not yet.

Joseph Smith, a former North Carolina bank regulator and the head of the Office of Mortgage Settlement Oversight, says in the little over four months since the settlement was signed, his office has gotten nearly 1,000 complaints from consumers and about 85 complaints from lawyers and other professionals who work with borrowers facing foreclosure. One of the biggest problems with the settlement is that there is a lot of wiggle room in it. Not all of the money the banks have pledged as part of the settlement will be used to do modifications. The banks can get some credit for demolishing homes and forgiving the remaining debt of homeowners who lose their homes to foreclosures, something they do routinely anyway. By some estimates, the banks could get away with doing as little as $10 billion in actual principal reductions.

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So are the banks living up to their end of the bargain? Considering there are 11 million homeowners underwater, a million or so of which who are behind on their mortgage payments, 1,000 complaints even in just a few months seems low. Some of that may have to do with lack of advertising and public awareness of his office. But the professionals, or at least a large portion of them, who work with homeowners should know about Smith’s office. There are dozens of legal aid offices around the country trying to get mortgage relief for borrowers. So again 85 feels low.

What’s more, Smith’s office says it hasn’t really gone through those complaints. So it’s not clear how many of those complaints are legit, or new. Homeowners have been complaining for a while they are being given the run-around and that banks aren’t modifying mortgages that should qualify for modifications.

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Still, the mortgage settlement was supposed to change that. Yet attorneys at Staten Island Legal Services, one of the organizations that has logged complaints with mortgage settlement office, say they haven’t seen a significant change in the banks’ behavior since the settlement.

For instance, one of the terms of the settlement is that the banks have to provide a single contact for consumers. Joseph Sant, a senior attorney at SILS, says banks are now doing that regularly. But that single point of contact tends to change every few weeks, and they often have little knowledge of borrower’s loans. Banks, according to the settlement, are supposed to tell borrowers within 30-days whether they have qualified for a modification. Sant says that rarely happens.

Overseer Smith says its still early days, and that banks have until early October to fully comply with the servicing standards in the settlement, and three years to complete all required mortgage modifications. And he says he has seen some evidence that banks have begun to cut loan amounts.

But Smith says he is worried about the complaints, which he says are not only coming into his office but to state attorney generals around the country. The California AG has set up her own mortgage settlement office, which Smith says has gotten many more consumer complaints than his own.

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Smith’s office will release a preliminary report in August that will in part report on the number and type of modifications banks have done under the settlement. Neil Barofsky, the former inspector general of TARP and recent author of the book Bailout, says one of the reasons there haven’t been more complaints is because the government’s past poor efforts have made borrowers wary of modification programs. “There’s HAMP fatigue,” says Barofsky of the government’s main modification program. “When they hear government modification programs, people have been taught to run for the hills.” That lack of desire to participate may end up being the settlement’s biggest hurdle. We’ll see.