Any time I see a 74 percent jump in anything, I hear alarm bells, so when the Treasury Department reported just that big a jump in its Home Affordable Foreclosure Alternatives (HAFA) program, I figured there had to be something really big behind it.
And I was wrong.
There's nothing big behind it, in fact there's something very small behind it: Small numbers.
HAFA provides financial incentives for servicers and borrowers to do short sales (selling the property for less than the value of the mortgage) and deeds in lieu of foreclosure (basically just giving the property back to the bank). The program launched in April of 2010 and was later streamlined in December, 2010, based on feedback from mortgage servicers, real estate agents and homeowners.
So far, HAFA has completed 7,113 short sales or DIL's. In April, however, HAFA saw 1,666 completed, up 74 percent from the 959 done in March.
Why the jump?