Bank of America Corp., plagued by complaints about customer service in its mortgage unit, said it hasn’t yet refinanced a “significant number” of loans as part of the industry’s $25 billion settlement of foreclosure abuses.

The lender blamed the “time required to underwrite” loans for why it hasn’t completed many of its planned $1 billion in modifications, according to a filing earlier this month. By contrast, JPMorgan Chase & Co. said last week it has already finished a “significant portion” of its $500 million program and Wells Fargo & Co. said it expected to complete its $900 million requirement two years ahead of the 2015 deadline.

“The infrastructure Bank of America has to handle an issue of this magnitude isn’t great, so they’re last out of the gate,” said Nancy Bush, an analyst and contributing editor at SNL Financial, a research firm in Charlottesville, Va. JPMorgan and Wells Fargo have better mortgage systems, she said.

Delays mean distressed Bank of America borrowers may miss out on record low interest rates that could ease their burden. The lender, overwhelmed in February by demand under an earlier federal refinancing program, could also forgo incentives for early completions and face penalties if it doesn’t help most borrowers within two years under the U.S. settlement.

The firm doesn’t expect to pay any fines because it’s “on a path” to meeting homeowner assistance pledges within a year, Jumana Bauwens, a Bank of America spokeswoman, said in an email. The Charlotte-based company started to contact refinancing customers in May and will continue through year-end, she said.

Bank of America and other lenders are compelled to offer the modifications under a February accord with the Department of Justice and 49 state attorneys general after probes into shoddy mortgage servicing. Allegations included the use of “robo-signers” to speed home seizures by submitting foreclosure claims without checking their accuracy. Bank of America pledged almost half of the fines and assistance in the $25 billion deal.

Banks get credit toward reaching the targets set by the settlement when they assist homeowners by reducing interest payments and debt. Loans modified within the first year of the program are worth 25 percent more in credits, giving lenders motivation to act quickly.

Interest rates may be trimmed by an average of 2 percentage points for as many as 25,000 borrowers, Bank of America said in an Aug. 2 filing. Only customers who owe more than their houses are worth and are current on payments are eligible. The moves are meant to earn $1 billion in credits under the accord.

An additional $7.6 billion of assistance involves principal reductions and actions such as cash incentives to sell a borrower’s home for less than the amount owed, known as a short sale. Bank of America said it will offer an average $150,000 reduction to more than 200,000 overdue customers by this month.

Homeowner response

Response to that program also has trailed other firms in the settlement. Homeowners exhausted from fighting foreclosure may be skeptical of the offers, Ron Sturzenegger, head of Bank of America’s Legacy Assets Servicing unit, said in June.

“Unfortunately, many customers may just be tired of the process and thinking about giving up,” he said.

Housing advocates have said the low response is because borrowers already have struggled with lost paperwork and unresponsive customer service. Bank of America, the second biggest U.S. lender by assets, had the lowest rating of any big bank in a December survey by Ann Arbor, Mich.-based American Customer Satisfaction Index LLC.

Bank of America is successfully reaching and assisting customers, said Dan Frahm, a spokesman for the lender. He declined to say if response rates had improved from June.

“People clearly want to see results as quickly as possible, particularly given there’s been a slight uptick in foreclosure rates,” said Mike Calhoun, president of the Center for Responsible Lending. “Most people think interest rates are at or near the bottom, that they can only go up.”

The bank, led by CEO Brian Moynihan, has committed about $43 billion to clean up defective mortgages and shoddy servicing since the start of 2007. Moynihan, 52, became CEO in 2010, telling staff when he was named that “our core businesses are the right ones, we just have to execute.”

Wells Fargo, which replaced Bank of America as the biggest mortgage servicer and lender, expects to earn $900 million in refinancing credits by March 2013, according to Tom Goyda, a spokesman for the San Francisco-based company.

Led by CEO John Stumpf, 58, the bank said Aug. 7 that a “higher-than-expected response” meant that it would likely go beyond the settlement’s minimum requirements and help as many as 40,000 borrowers, double the number it said three months earlier. Refinancing will continue beyond March for those extra clients, Goyda said.