Lenders completed 342 short sales and deeds-in-lieu of foreclosure through the Treasury's Home Affordable Foreclosure Alternatives program since it began through Sept. 30, according to a report from the Special Inspector General for the Troubled Asset Relief Program. But, according to some, the numbers don't add up. HAFA went into effect April 5 as another way for lenders to keep borrowers who meet the basic requirements for the Home Affordable Modification Program but could not successfully complete the three-month trial stage. So far, the Treasury has paid out $1.6 million in TARP funds to investors, borrowers and servicers in connection with the 342 short sales or DILs through HAFA, according to Treasury data given to SIGTARP. The number is surprisingly low, considering how many trials and permanent modifications have been canceled from HAMP. Servicers have canceled 699,924 trial modifications as of September and another 29,190 permanent modifications. Equator, a third-party technology provider that processes short sales for major banks such as Bank of America (BAC) on its Web-based platform, said the SIGTARP numbers for HAFA is far too low. According to Equator's data, lenders, real estate agents and homeowners have initiated 117,000 HAFA short sales on its system from April through Oct. 27. No major bank had an official comment or could release their own HAFA numbers, but a spokesman at one of the big-four said the low number was very surprising and could be the result of buyers losing interest when they weren't getting the discount they wanted. "If you look at the numbers nationwide then I do believe this is low," said Rick Desi, a short sale real estate agent and COO of Nextage Client First Realty in California. "But I know since August the market has weakened, meaning that there were less buyers and the ones we had were more picky than before." A Treasury official told HousingWire that HAFA is still relatively new, but he did admit there weren't a lot of agreements between banks and buyers for short sales. The official did not give a number, and instead deferred to the SIGTARP report. Early numbers from the Treasury regarding outcomes of the canceled HAMP mods pointed to possible higher results for HAFA. Through September, the top-eight servicers in the program conducted 33,259 short sales and DILs on the 524,695 trials the companies canceled, roughly 6.3%. Many software providers and third-party outsourcing firms started gearing up for HAFA by introducing new products to the market, but most it seems now have gone through proprietary programs. The Treasury official added that one thing HAFA has done is set a standard for how short sales, often a timely process that can last up to six months, are to be done. It provided incentives to both the lender and its investors, who are often included in the decision on whether or not to sell the home for less than what is owed on the mortgage. According to HAFA guidelines, servicers receive $1,500 for each successful short sale done through the program, but it forfeits the right to pursue the remaining difference between the proceeds of the sale and the balance of the loan. Borrowers receive $3,000 for relinquishing the home. For every $3 an investor gives up in any subordinate liens on the home, the Treasury pays $1, up to a $2,000 maximum. SIGTARP also reported numbers on the HAMP second-lien program. The program known as 2MP requires a servicer to modify or extinguish a second lien if the first is worked out through HAMP. According to SIGTARP, the Treasury has paid out $10,500 in TARP funds for 21 second-lien modifications under 2MP. During the recent foreclosure crisis and the mortgage industry's reliance on loss mitigation, the top-five mortgage servicers grew their market share to 60% as of the end of 2009, up from 27% ten years before. Market players aren't the only ones questioning the validity of SIGTARP findings. On Wednesday, the White House called SIGTARP findings over the American International Group (AIG) investments incorrect. The SIGTARP office was not available for comment, but according to the report, while TARP dollars did well to steer the financial industry out of a complete collapse, it has fallen "woefully short" for homeowners. Write to Jon Prior.