According to recent data released by the Treasury Department, the number of short sales and foreclosures conducted by those participating in the Home Affordable Foreclosure Alternatives program increased by more than 2,000 during March.
The program was created last April and provides any consumer that is not eligible for the Home Affordable Modification Program with an alternative. Since its inception, associated servicers have begun 12,266 agreements and finalized 5,447. During March, more than 1,000 transactions were completed.
Another reason the Treasury Department started the HAFA program was to make short sales more effective, as the program now has a structure and timeline for these transactions.
According to the Treasury's data, more than 1.8 million loans were declined a HAMP trial or were denied by the country's 10 largest servicers, typically because they failed to have proper documentation or they redefaulted under new terms.
The American Mortgage Servicing's executive vice president, Jordan Dorchuck, believes that short sales can effectively help reduce losses associated with those seeking relocation, as well as for investors.
"From the [mortgage-backed security] investor perspective, market prices of their securities already reflect large foreclosure losses," Dorchuck relayed. "Short sales of mortgage loans should reduce those expected losses and achieve 'finality,' quickly."