HUD in Florida

• HUD's mission is "to create strong, sustainable, inclusive communities and quality affordable homes for all." Its Florida division provides services to Florida residents and homeowners ranging from advice on housing discrimination complaints to applying for federal, state and local loan programs. One of the most important services HUD offers is how homeowners can avoid foreclosure. HUD uses re-appraisals to assist in this process.
  
  

Property Appraisal

• In order to receive a mortgage loan from a lender, the lender requires a property appraisal. HUD works with the Federal Housing Administration (FHA) to provide FHA-certified appraisers to perform the appraisal itself. The appraisal will determine the fair market value (FMV) of the property, taking into consideration its location, size, condition, features and the local housing market. Since the property is the secured collateral on the loan, lenders require the appraisal to make sure they can get back their investment, should the mortgagee default on his loan and the lender has to foreclose on the property.
  
  

Foreclosure

• Foreclosure is the legal process by which a mortgage lender takes possession of a property they gave a mortgage to, in order to cover the homeowner's default on their loan. Florida's HUD division offers counseling and assistance to homeowners who are in jeopardy of losing their homes through foreclosure. One type of assistance they offer is loan modification appraisal.
  
  

Loan Modification Appraisal

• If a property's value has gone down over time, it might be worth less than the current mortgage on the property. HUD can reappraise the home to ascertain its current FMV for the purpose of approaching the lender to modify the loan so that it better reflects the home's current value. For instance, assume that a property purchased in 2007 had an FMV of $100,000, and the buyer put 20 percent down ($20,000) and received a mortgage for the remaining $80,000. According to Florida's Department of Revenue, property values in some parts of Florida have declined considerably since 2007. Because of this, the property might now only be worth $75,000, and the homeowner has lost all his equity (his $20,000 down payment) in the property. With the new appraisal of $75,000, HUD can now negotiate with the lender to modify the mortgage loan both to reflect the property's current value, and also so that the homeowner can afford lower mortgage payments on a lower loan, and therefore avoid foreclosure. When HUD reappraises the property for the purpose of modifying the loan, the appraisal is called a "loan modification appraisal."