Barbara Desoer, who runs the mortgage business at the nation’s biggest lender, told the Senate Banking Committee Tuesday that BofA’s efforts to deal with delinquent borrowers have failed to meet expectations. The bank’s moves “have not met all of the needs nor have they been executed well in some cases,” she said.

The same might be said of Desoer’s attempt to come clean, if that’s what this was. She conceded that 14% of BofA borrowers are either late on payments or in foreclosure – though she took a page out of the public relations handbook in how she presented that fact.

“The majority – 86% – of our customers are current and making their mortgage payments on time every month,” she said.

Desoer made the comments as bankers were called before the committee to explain their actions in the foreclosure fiasco, which in the past two months has unearthed thousands of instances in which bank employees failed to abide by applicable laws in enforcing foreclosure actions.

Government watchdogs are now questioning whether the banks’ failures to handle homeownership documents could lead to another financial crisis.

Desoer expressed some contrition for BofA’s failures in that regard, which have been extensively documented.

It is our responsibility to be fair, to be responsive and, where a foreclosure is unavoidable, to treat customers with respect as they transition to alternative housing.  We, and those who work with us in connection with foreclosure proceedings, also have an obligation to do our best to protect the integrity of those proceedings.  When and where that has not happened, we accept responsibility for it, and we deeply regret it.  We take seriously our obligation to the customer, the investor, the legal process and the economy.

But as good as it is to hear BofA say it regrets its failures, ProPublica suggests the bank is still not completely leveling with us.

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While Desoer notes that BofA has completed 700,000 loan modifications since the housing crisis erupted in 2008, she claims it has been hampered in those efforts by restrictions enforced by bondholders:

Many investors limit Bank of America’s discretion to take certain actions.  When working with delinquent customers, we aim to achieve an outcome that meets customer and investor interests, consistent with whatever contractual obligations we have to the investor. 

But ProPublica writes that banks have been blaming investors since the foreclosure crisis set in – in spite of the lack of evidence that investors are really the ones preventing modifications from happening.

Investors are also dismayed, saying servicers are not acting in their best interests. “This is one of those rare alliances where investors and borrowers are on the same page,” according to Laurie Goodman, senior managing director at Amherst Securities, a brokerage firm that specializes in mortgage securities. She says investors have “zero vote” in determining individual loan modifications and, instead of foreclosures, prefer sustainable modifications that lower homeowners’ total debt.

So Bank of America is starting to come to grips with its problems on the foreclosure front, after months of waffling. But it still has a ways to go.