The Treasury Department has released the results of its second-quarter assessment of the 10 largest servicers participating in the government’s Making Home Affordable program.

Officials say they will continue to withhold program incentives owed to Bank of America and JPMorgan Chase. The two were determined to need “substantial improvement” in key areas of borrower outreach, borrower evaluations, and program reporting, although Treasury did note that “some improvements have been made” by the companies since its previous assessment.

BofA and JPMorgan received the same score last quarter, as did Wells Fargo, but Wells Fargo has now elevated its grade to needing “moderate improvement” and with the movement has reopened the flow of incentive payments for loss mitigation actions completed under the Making Home Affordable umbrella.

American Home Mortgage Servicing, CitiMortgage, Ocwen Loan Servicing, and Select Portfolio Servicing also received the “moderate improvement” rating.

Three servicers have been identified as needing only “minor improvement” – GMAC Mortgage, Litton Loan Servicing, and OneWest Bank. Treasury’s previous quarterly assessment put no servicers in this category, which is the highest on the three-level scale.

Freddie Mac serves as Treasury’s compliance agent for the Making Home Affordable program and conducts the performance assessments of the 10 largest servicers.

Each area tested falls into one of three overall compliance categories – identifying and contacting homeowners; homeowner evaluation and assistance; and program management, reporting, and governance. Once the reviews are complete, the results are shared with the servicers and areas are identified that need remediation.

Treasury has put the results of each servicers’ compliance review along with their individual ratings for each performance category on display as part of the department’s latest Making Home Affordable report card. These details can be accessed online.

“[W]e need to keep the pressure on servicers to effectively assist those homeowners who are still struggling and eligible for assistance,” said Tim Massad, Treasury assistant secretary for financial stability.

The department said in a statement that these servicer assessments – which were first introduced in June and are published quarterly – are intended to set a new industry benchmark for disclosure around servicers’ efforts to assist struggling homeowners, while pushing them to correct identified deficiencies.

Treasury’s report shows that 28,328 new permanent modifications were completed through the government’s Home Affordable Modification Program (HAMP) in July, bringing the total number of active permanent mods to 675,447.

During that same month, 22,079 new HAMP trials were started. There are now 106,078 trials in process. Seventy-five percent of eligible homeowners entering a HAMP trial modification since June 1, 2010 have received a permanent modification, with an average trial period of 3.5 months.

Government data shows that servicers have cut principal balances on 9,221 active permanent HAMP modifications under the program’s Principal Reduction Alternative (PRA). Another 18,404 HAMP trials carry principal writedowns.

Servicers completed 2,076 short sales under the Home Affordable Foreclosure Alternatives (HAFA) program during July and 58 deeds-in-lieu (DIL). Completed HAFA transactions since the program launched total 12,888.