Government-sponsored short sales spiked and modifications remained steady in April, but the majority of foreclosure prevention work remains in private programs. Servicers participating in the Home Affordable Foreclosure Alternatives program completed 1,666 short sales and deeds-in-lieu of foreclosure in April, a 73% increase from the previous month. The Treasury Department launched HAFA in April 2010 to provide servicers an incentive to pursue other options to borrowers denied a Home Affordable Modification Program workout. Servicers converted another 29,000 trials into permanent modifications, in line with the monthly average. Since the program launched in March 2009, servicers started nearly 700,000 permanent mods. Since HAFA began, servicers started 14,893 short sales and DILs and completed 7,113 transactions. According to HAFA guidelines, a servicer has 120 days to close on a HAFA deal after signing an agreement with the homeowner over the terms of a potential short sale. Transactions require cooperation of junior lien holders and mortgage insurers. But fewer delinquent borrowers fall into these government-sponsored programs when compared to private ones. The top 10 servicers dropped or denied more than 2 million borrowers from HAMP trials through April, according to the Treasury. Of these, more than 114,000 received a short sale or a deed-in-lieu of foreclosure. When taken as a percentage then, HAFA accounts for 13% of all such transactions. The Treasury maintains while the program numbers will underwhelm original estimates, they provide a backbone for lenders to design their own programs. But in April, the Treasury cracked down on three servicers for their poor performance in HAMP. This smaller scope and apparent lack of servicer cooperation persuaded House Republicans to vote for ending the program nearly two years early. However, lenders say strict program guidelines push more borrowers into private modifications and short sale initiatives. Theresa Schrettenbrunner, an executive at Wells Fargo (WFC) said 15% of its more than 673,000 active and trial modifications are done through HAMP. “It’s just that fewer borrowers qualify for HAMP,” Schrettenbrunner said. Write to Jon Prior. Follow him on Twitter @JonAPrior.