RESTRICTED USE DESK APPRAISALS
Information and guidelines for ordering a RUDA from Blue Star Appraisals Inc.
As we prepare for the upcoming changes (due to the new HVCC) set to go into effect on May 1, 2009, we here at Blue Star Appraisals Inc. are reviewing our practices to be certain that we are in compliance with not only the new guidelines, but that we remain in compliance with current USPAP guidelines as well.
There are many opinions as to the allowance of “comp checks” under USPAP. Our understanding, in consultation with our legal advisors, is that it is permissible under current USPAP guidelines to furnish Restricted Use Desk Appraisals (RUDA’s) provided: there is a defined scope of work, the intended use/user is made clear, and all proper documentation is kept in the work file for the proscribed length of time.
Accordingly, Blue Star Appraisals Inc. currently offers a RUDA with a very limited scope of work, with the only intended user being the mortgage broker or loan officer who makes the request, and the only intended use being for the individual user to determine whether or not to pursue a mortgage finance transaction. The RUDA returns a range of value based on the information you provide, information from MLS and information from the appropriate taxing authority. The RUDA is not a guarantee of any value that may be determined by a subsequent full appraisal, and it cannot be used in any way to obtain a loan, obtain insurance, or for any other purposes.
As many of you may be aware, it is against USPAP guidelines for an appraiser to accept an assignment with a requested or pre-determined value. At Blue Star Appraisals Inc., our appraisers base their opinions of value on the most relevant data available at the time of the appraisal without regard to any value that the client, owner, or anyone else estimates, or needs in order to secure a loan. The only time that any order should be accompanied by a value is when the subject is under contract, in which case the appraiser will need only the contract price and a copy of the contract.
When ordering a RUDA please give us the address and as much information as you would like us to use in completing the assignment (especially important where MLS data is unavailable or tax information is incomplete). Requests for a RUDA may be made by email and do not require an order form. Please DO NOT tell us what the homeowner or anyone else estimates as the to the value of the subject, or what value is necessary to make your transaction workable – this information will have no effect on the appraised range of value and may give an appearance of impropriety if the estimated value provided happens to be within the range returned by the appraiser.
At Blue Star Appraisals Inc. we are committed to providing our clients with accurate, informative and independent appraisals. We strive to maintain integrity beyond reproach and seek to not only act without impropriety, but to be certain that our practices are transparent and do not allow for even the appearance of impropriety. We know our clients, and we know that you share these values.
It appears now that the proposed HVCC will not allow for RUDA’s prior to applying for a loan. During the next few months we will be talking with you all and others to fully understand what the new guidelines mean (if in fact the new version, found here, takes effect on the announced date) and what changes will have to be made to be in compliance. In the meantime, we are happy to provide this service to you.
Please let us know if you have any questions or comments regarding this topic.