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By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – 35 mins ago

WASHINGTON – Executives at two of the nation's largest banks say they are struggling to get homeowners to complete the necessary paperwork for the Obama administration's mortgage relief plan, and only a fraction of homeowners have finished the process.

A Bank of America executive said only about 15,000 homeowners, or a quarter of the 65,000 borrowers in trial modifications that are set to expire by year-end have sent back their paperwork, according to prepared testimony for a Tuesday hearing on Capitol Hill.

Jack Schakett, Bank of America's credit loss mitigation strategies executive, cited "ineffective communications with customers, shortcomings in document maintenance, misunderstandings about program requirements, and the inability to comply by some borrowers."

Similarly, JPMorgan Chase & Co. said that about 16,000 of its borrowers have been approved for a permanent modification, with 4,300 completing the process as of the end of last month.

"We are facing challenges with borrowers completing documentation or making trial plan payments as agreed," Molly Sheehan, JPMorgan Chase's executive in charge of housing policy, said in testimony prepared for the same hearing.

The program, announced in February by President Barack Obama, allows homeowners to have their mortgage interest rate reduced to as low as 2 percent for five years. Borrowers who qualify sign up for trial periods of up to five months. They must complete a stack of paperwork, including proof of income, to make the modifications final.

Faced with disappointing progress, the Obama administration said last week it would spend the coming weeks cracking down on mortgage companies, also known as loan servicers. Treasury Department officials said they would send "SWAT teams" to monitor the eight largest companies, including Bank of America and Chase, and request twice-daily reports on their progress.

In an effort to shame the companies into doing a better job, Treasury will publish a list this week of the mortgage companies that are lagging.