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?

“It’s too early to draw broad conclusions,” says Treasury spokesman Andrea Risotto, noting that Treasury just began reporting the numbers two months ago. She also points to a long reporting lag because the short sale process still takes so long. But none of this is the story. The 74 percent jump exists because the numbers are just so small, and that’s the story. HAFA is doing a relatively miniscule number of short sales, when you compare the program to what the big banks are doing on their own.

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There is no official settlement.

There is no multi-billion dollar fund or penalty and there is no word from Federal Regulators as to how the banks will ultimately “fix” the foreclosure paperwork issues.

Yet.

But a meeting here in DC of the fifty state attorneys general was too good to pass up for a couple of hundred protesters demanding, “a strong settlement that includes principal reduction on millions of mortgages.”

I have to hand it to the Iowa deputy attorney general, Tam Orminston, who put himself into the middle of a crowd of troubled, and angry borrowers, led by National People’s Action and PICO National Network. One by one borrowers told of their mortgage woes, amid shouts of “That ain’t right!” from the surrounding crowd.

The protesters called a potential $20 billion settlement with the big banks “chump change,” even though that number is far from agreed upon. As I stood watching, Missouri Attorney General Chris Koster came over to our camera to chat. He was advocating that a settlement be done quickly and almost sounded as if he were willing to back off some of the demands of a 27 page settlement “framework” from Iowa attorney general Tom Miller, who is leading the 50 state foreclosure investigation, that outlines new foreclosure procedures and loan modification mandates for the banks as part of a potential settlement. That document will be presented to all the AGs this afternoon but was leaked to the press Friday.

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It wasn’t at all what I expected. With accusations over the weekend by various journalists that the Realtors have been overestimating existing home sales numbers, I was ready for a full-court PR press at this morning’s monthly sales report lockup. Not so much.

NAR chief economist Lawrence Yun opened with, “This is going to be a fun press conference!” After detailing the usual monthly report, and carefully acknowledging a nearly 33 percentage point seasonal adjustment in sales numbers (!), Yun addressed the brewing controversy. He explained how they last “benchmarked” sales using Census figures back in 2000, but that they couldn’t do that in 2010 because the Census changed some of its survey questions. He admitted that the last revision to data in 2000 showed a 13 percent “drift,” as in the NAR’s numbers were 13 percent too high.

I won’t get into all the reasons for the “benchmark” troubles…okay, it’s really 3 reasons: 1) Consolidation of many MLS’s (multiple listing service—where Realtors list properties), so a rise in the numbers could be due to the MLS’s area getting bigger, not more sales, 2) Properties being listed on multiple MLS’s (so sales are double counted), and 3) A big drop in For Sale By Owner properties, so with more sellers using agents, there are more properties on the MLS to sell.

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