Yesterday, the Treasury Department released a scorecard of just how well (and poorly) the largest mortgage servicers are doing at meeting certain benchmarks of its Making Home Affordable program. Not surprisingly, Bank of America, Wells Fargo and JPMorgan Chase — the three largest servicers — were called out for needing “substantial improvement,” meaning that the banks will not receive millions of dollars in federal incentives until they get their acts together.

Bank of America fared the worst in the Treasury’s assessment. Out of the seven benchmarks given to servicers, BofA was only able to make one of them and only able to score marks of “needs moderate improvement” on two.

BofA was dead last among the servicers when it came to its conversion rate of trial modifications, the amount of time it takes to resolve escalated cases, and missing modification status reports.

This last metric — a measure of the servicer’s ability to promptly report on modification status — is where BofA really takes the cake. In March 2011, Treasury says the bank was unable to provide 3.9% of these reports. Most of the other servicers on the scorecard were below 1%, with GMAC’s 1.4% being the toughest competition for Bank of America.

On the bright side, that 3.9% is a huge drop from BofA’s Dec. 2010 mark of 19.1%, so they are improving.

In May, BofA, Chase and Wells Fargo received a total of approximately $24 million in federal incentives. The banks will have these incentives withheld until they can show substantial improvement.

None of the banks were too thrilled by the news. Chase says it “respectfully disagrees.” Wells Fargo says the assessment “paints an unfairly negative picture of our modification efforts” and that the bank is formally disputing the Treasury report. Meanwhile, BofA reminded us all that it is “committed to continually improving our processes to assist distressed homeowners.”

A fourth servicer, Ocwen, was also placed in “needs substantial improvement” category but the Treasury opted not to penalize it at this time because “their compliance results were substantially and negatively affected by a large servicing portfolio acquired during the compliance testing period.”

No servicers got high marks on the scorecard. The remaining six institutions — American Home Mortgage Servicing, CitiMortgage, GMAC, Litton Loan, OneWest and Select Portfolio — were all labeled as needed moderate improvement.

“We need servicers to step up their performance to meet the needs of those still struggling,” said acting Treasury Assistant Secretary for Financial Stability Tim Massad.

You can see the whole scorecard [PDF] here.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.