As an appraiser I feel that it is very necessary to regulate the AMCs.  They are in control of our fees and do not pay us fairly nor do they pay us in a fair amount of time.  I appreciate the begining works of requiring AMCs to regulate and registar. I would appreciate there is very clear writting that states that they must pay us within 2 weeks or max 30 days.  They often times hold onto our fees and collect intrest for up to 90 days.  I have some AMCs that just shut down and start a new one under a new name and still owe us thousands of dollars.  Also I have some that havent paid in 6 months.  I would approve of the proposed regulations however ask that you take a state poll asking the appraisers candidly what their NON-AMC fee is.  I say non-AMC fee because amcs threaten no work or take the least amount in splits of our own fee.  Alot of appraisers need the option to all collectively set an average or bar of reasonable customary fees.  Please defend our small industry from appraisers being forced out of the  business because we cant simply take on the liability of doing appraisals for next to nothing after all our fees for E/O insurance, belonging to realtor boards and etc.  Keep us professional.  I think this is the first step to a few necessary ones.  I highly encourage our state to get this in the right direction as soon as possible, to protect the economy, our consumers and our working appraiser professionals here in the state of Virginia.  Thank you. 

Southwest Financial Services, Ltd., an Appraisal Management Company, urges the Real Estate Appraiser Board to reconsider the fee schedule for registration of AMCs as set forth in 18 VAC 130-30-60. This regulation would require each AMC to submit a National Registry Fee of $50.00 per appraiser working for or contracting with an AMC. The regulation states that this $50 fee per appraiser is required pursuant to Section 1109 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 USC §§ 3331-3351). Such Section 1109 mandates that states collect fees for submission to the Appraisal Subcommittee to maintain a registry of individuals who are qualified and eligible to perform appraisals in connection with federally related transactions.

 As part of the licensing regulations for appraisers, appraisers themselves are already required to submit fees for submission to the Appraisal Subcommittee for the same purpose of being listed on the National Registry. Pursuant to 18 VAC 130-20-90, appraisers are assessed an $80.00 National Registry fee when applying for a permanent license in Virginia. Appraisers then pay $80.00 of the appraiser biennial renewal fee of $150.00 for submission to the Appraisal Subcommittee. 18 VAC 130-20-130. AMCs are only permitted to contract with licensed appraisers in accordance with Section 54.1-2022 of the Code of Virginia. Therefore, since each of the licensed appraisers working for or contracting with an AMC must pay a National Registry Fee, it is duplicative to collect an additional $50 fee per appraiser from each AMC. Furthermore, many appraisers work for or contract with multiple AMCs. The proposed regulation will cause Virginia to collect the same National Registry fee from an appraiser and then from each AMC which that appraiser works for or contracts with. Additionally, collecting a National Registry fee from each AMC for each appraiser is unnecessary because the Appraisal Subcommittee only maintains one national registry of individuals who are qualified and eligible to perform appraisals in connection with federally related transactions, and the National Registry only tracks appraisers, not AMCs.

For these reasons, Southwest Financial Services, Ltd. asks the Real Estate Appraiser Board to remove the requirement that AMCs must submit a fee of $50 per appraiser working for or contracting with an AMC.

Here are Regs taken directly from the state of Lousinas AMC law. I would like Virginia to do/adopt  same. Thank you.

http://www.reab.state.la.us/AMC_license_law.html

 

§3415.15. Fees; customary and reasonable; disclosure 

        A. An appraisal management company shall compensate appraisers at a rate that is customary and reasonable for appraisals being performed in the market area of the property being appraised, consistent with the presumptions of compliance under federal law. 
        B. An appraisal management company shall separately state to the client all of the following: 
        (1) The fees paid to an appraiser for appraisal services. 
        (2) The fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser's services. 
        C.(1) An appraisal management company shall not prohibit any appraiser who is part of an appraiser panel from recording the fee that the appraiser was paid by the appraisal management company for the performance of the appraisal within the appraisal report that is submitted by the appraiser to the appraisal management company. 
        (2) An appraisal management company shall not include any fees for appraisal management services performed by the company in the amount the company reports as charges for the actual completion of an appraisal by the appraiser. 

Acts 2012, No. 429, §1, eff. May 31, 2012. 

I believe the way the AMC system controls appraisers with low-ball fees and immediately expected  turn-times puts an appraiser in a bad position. Many simply have to bite the bullet and accept low fees and deal with the constant aggravation of phone calls, e-mails, ect. I believe that it is time for appraisers to be paid what they deserve for the amount of work, liability, ect. that we must deal with on a daily basis. Stand up appraisers and let your voice be heard. 

These companies promise lenders that they will manage the ordering, do quality review, and make payments for appraisal services.  They are paid an additional sum above an appraisal fee by a lender for the services they perform.  They claim that they are an independent third party and that they are able to provide unbiased ordering services and review to better ensure that they are minimizing the risk of the lender.  Currently, these companies have gone unregulated in most states across the country. This unregulated environment has caused across the board complaints from appraisers.  Some of these management companies now require 24-48 hour turnaround times, force appraisers to reduce their fees or risk being removed from their appraiser lists, pressure appraisers to meet needed values, and, despite claiming to be unbiased in their ordering systems, some of these companies assign appraisers by broadcasting appraisal orders available at a first come first serve basis, leaving little time for an appraiser to know what type of property it is before they accept the assignment.  These management companies are diminishing the appraisal industry.  The homeowner is getting charged $600 - $800 and the appraisers are only receiving $250 - $350 for their services.  Good appraisers are leaving the industry, leaving inexperienced appraisers in markets nationwide.  Appraisers are cutting corners in order to please these companies and do enough appraisals to pay their bills.  These companies have also started to slack on the payment of appraisers within a reasonable timeframe or at all.  If we don't put a stop to this, the impact will devastate the appraisal industry and we will be in another worse problem than when the bubble bursted.

The appraisal industry has turned into a profession, I'm sad to say, I would not advise bright young candidates to enter. And that is awful for the real estate industry. While Dodd/Frank legislation had good intent it has been quite harmful to appraisers in general. The great big banks turned ordering an appraisal into a profit center collecting $450+, paying appraisers significantly less and pocketing much of what they collected as an "appraisal fee". In their defense that's what they do, make money. The system allows them to do that. The advent of AMCs additionally separated the local client from the appraiser to the extent that the client has no clue who the appraiser is that they are trusting their business with. The good, experienced and qualified appraisers who should be engaged for appraisal assignments are way too often not engaged because an AMC or a big banks clearing house type ordering department can locate someone who will offer their services for a greatly reduced fee. Unfortunately for the real estate industry, you tend to get what you pay for. I graduated from UVA with a degree in Economics a long time ago, have had a real estate license for 25 years, have been multi-term president of my local appraisal chapter, stay abreast of trends and real estate news, am an officer with VaCAP and am currently on the BOD of NVAR. I've been a full time appraiser since 1987 and before that ran a title company and settlement company so you would think I'd be the type of candidate banks and mortgage companies would be looking for. But mostly what the system ultimately employs is the cheapest fee, quality be damned. Unfortunately, the appraisal profession has little voice, no lobby and no recourse. The recently passed Lousianna legislation is whats needed in the Commonwealth in my opinion.

As a state certified residential appraiser, I fully support the regulation of all Appraisal Management Companies in the state of Virginia. Furthermore, I would also like to see the implementation of regulating "customary and reasonable fees" for all Appraisal Management Companies as well (as recently passed in the state of Louisiana). Appraisers deserve to be compensated for the quality of their work (just like any other profession), not by how quickly they can turn around an assignment and/or how low of a fee they are willing to accept an assignment for. Thank you for your time and consideration on this matter.

 

AMC's are engaging in manipulative practices - I received a request, yessterday for an assignment in a rural area, with 1 hour to respond, fee was less than half for acreage;  I clicked to accept with conditions, intending to add an increased fee, I was presented with their disclaimers seeking a hold harmless agreement.    This is an example of the manner in which many of these organizations operate.   In addition to supporting this legislation, I also support a requirement that AMC's list their total fee to the consumer, just as we list the fee paid.    Also, I object to the notion that an AMC who "reviews, even for a technical analysis" is not an AMC but rather a portal.  That is a convenient way to circumvent proposed legislation.   I applaud the legislature for taking up this issue to protect the consumer.  

As a state certified residential appraiser,with over 9 years in the industry I fully support the regulation of all Appraisal Management Companies in the state of Virginia. Furthermore, I would also like to see the implementation of regulating "customary and reasonable fees" for all Appraisal Management Companies as well (as recently passed in the state of Louisiana).Appraisers are asked to a daily basis to accept fees that are inconsistent with the amount of work required to produce credible reports, then they are pressured   by AMCs to produce the report is a time frame that pressures appraisers.  Appraisers deserve to be compensated for the quality of their work (just like any other profession), not by how quickly they can turn around an assignment and/or how low of a fee they are willing to accept an assignment for. Thank

As an independent Fee Apprqaiser I feel that it is about time to start regulating the AMC community.  They do not desire to accept quality unless it is a by-product and they do not want to pay reasonable or customary fees for the work they purchase.   They often hold on to the fee until the appraiser threatens them with legal action.  Which is absolutely un-called for.   They repeatedly ask for a response to an order within two hours - inspect the property within 24 hours and have the report back within 48 hours.  And nowhere is there any indication that the goal should be to provide the clearest and best possible opinion of market value.  We are regulated by Virginia - The AMC's doing business in Virginia need regulation.  It appears that the Louisiana model would be a good one to follow and bring some accountability to out-of-control AMC's.

As a state Certified Residential Appraiser, I fully support the regulation of Appraisal Management Companies in the Commonwealth of Virginia. I would like to see the implementation of reasonable regulation regarding "customary and reasonable fees" for AMC's. In addition, consideration must be given to Lenders and Management Companies charging appraisers "back door" fees for the privilege of receiving assignments under the name of portal maintenance, technology and review fees that are deducted from the fee agreed upon in the letter of engagement. The charging of fees circumvents the disclosure of the true amount paid to the appraiser for services rendered and defrauds the reader of the report in which fee disclosure is made.

As a state certified residential appraiser, I fully support the regulation of all Appraisal Management Companies in the state of Virginia. Furthermore, I would also like to see the implementation of regulating "customary and reasonable fees" for all Appraisal Management Companies as well (as recently passed in the state of Louisiana). Appraisers deserve to be compensated for the quality of their work (just like any other profession), not by how quickly they can turn around an assignment and/or how low of a fee they are willing to accept an assignment for. Thank you for your time and consideration on this matter.

AMC's are destroying the appraisal profession. They do not pay reasonable fees and often assign the work to appraisers who are located outside the subject's property area. They can be slow in paying invoices and demand short turn times that reduce the accuracy of the appraisal. Please adopt regulations similar to what  Louisiana is planning to adopt.

As a state certified residential appraiser, I fully support the regulation of all Appraisal Management Companies in the state of Virginia. Furthermore, I would also like to see the implementation of regulating "customary and reasonable fees" for all Appraisal Management Companies as well (as recently passed in the state of Louisiana). Appraisers deserve to be compensated for the quality of their work (just like any other profession), not by how quickly they can turn around an assignment and/or how low of a fee they are willing to accept an assignment for. Thank you for your time and consideration on this matter.

 

With 32 years in the appraisal profession I fully support the regulation of all Appraisal Management Companies in the State of Virginia. The numbers of certified & licensed appraisers in the Commonwealth of VIrginia and in the Country are declining daily, much of this is due to the unfair pratices of AMC's within the last 5-10 years. I support legislation similiar to what was recently passed in Louisiana.

Secondly, I would like to compliment the Virginia Real Estate Appraiser Board. I have attended several meeting over the last couple years in Richmond. The board excercised due deligence in analyzing cases before them & was very professional.

Again, I strongly urge the the implementation of regulation regarding AMC's & "customary & reasonable" fees.

David R. Belote,SRA

 

In my 20+ years appraising real estate within the Great State of Virginia the last 5-7 years in my opinion have been negatively affected by the AMC's business model which more and more lenders are utilizing. The fee's are lower, turn times are often requested within 24-48 hours and often appraiser's are selected from out of the area because of their low fee's. The consumers have no idea they how much they are paying for our appraisal services because the AMC'S do not have to disclose this information. I would strongly urge the Board to review the Louisiana AMC License and Regulation Act- below are just a few of the most important issue's. In closing I would like to think the Board for considering the following information.

 

 

Louisiana “AMC License and regulation Act” reads;

§3415.15. Fees; customary and reasonable; disclosure

A. An appraisal management company shall compensate appraisers at a rate that is customary and reasonable for appraisals being performed in the market area of the property being appraised, consistent with the presumptions of compliance under federal law.

B. An appraisal management company shall separately state to the client all of the following:

(1) The fees paid to an appraiser for appraisal services.

(2) The fees charged by the appraisal management company for services associated with the management of the appraisal process, including procurement of the appraiser's services.

C.(1) An appraisal management company shall not prohibit any appraiser who is part of an appraiser panel from recording the fee that the appraiser was paid by the appraisal management company for the performance of the appraisal within the appraisal report that is submitted by the appraiser to the appraisal management company.

(2) An appraisal management company shall not include any fees for appraisal management services performed by the company in the amount the company reports as charges for the actual completion of an appraisal by the appraiser.

AMCs should not be allowed to blast email for orders as this promotes utilizing the cheapest appraiser rather than a qualified appraiser. 

Appraiser compensation should be based on reasonable an customary fees NOT inclusive of fees established by the AMCs payment history but rather a neutral 3rd party source.

AMCs should not be allowed to dictate to an appraisal company that they can not use 1099 contract appraisers. 

If an AMC wants a background check done on an appraiser, this should be at their cost not the appraisers.

 

 

As a state certified appraiser with over 8 years of experience in Northern Virginia I believe that AMC’s are destroying the Appraisal profession. I came across an article stating that the Appraisal industry is facing a drastic decline in its workforce. An FHA published roster of certified appraiser indicates an alarming 28% decline in just 3 years. (www.reversereview.com/magazine/feature-the-appraisal-problem.html‎)

A few days ago I attended a webinar with Richard Hagar SRA entitled “Keeping off Fannie Mae’s new appraiser “Black List”’.  The webinar was great and Richard offered excellent suggestions about how appraisers can stay off  that list. 

Basically, Uniform Mortgage Data Program (UMDP), Uniform Collateral Data Port (UCDP) and Uniform Appraisal Data (UAD) are enabling FNMA to monitor the accuracy and consistency of millions of appraisal reports creating a database on appraisers as well as lenders and AMCs who hire those appraisers; FNMA calls this Program Appraisal Quality Monitoring (AQM).

The results were as follows:

Fannie Mae has identified instances when lenders have delivered appraisals that were completed by appraisers whose license or certification has been revoked or suspended.  AMC’s are looking for fast and cheap; rather than qualified appraisers.  In this case, cheap fees are likely due to competition generated from unlicensed appraisers. FNMA also found instances where appraisers were not even licensed in certain states. According to Richard Hagar, those instances are as high as nearly 15,000 unqualified appraisers  performing appraisal work for AMC’s- of course those AMC’s are still in business!!   

I would definitely like to support the regulation of Appraisal Management companies in the Commonwealth of Virginia.  I would like to see the implementation of regulating “customary and reasonable fees” for all Appraisal Management Companies as recently passed in the state of Louisiana. 

With 20 years experience, I have watched the consequences of the "quickest, cheapest" business practices of most AMCs and the same things that led to the previous housing debaucle are already happening again.  We all know the AMCs with the worst track records of hiring the fastest and cheapest with no regard to the long term effects on local Homeowners or the overall economy. 

Please follow Louisiana's lead and incorporate that verbiage into the Virginia statute to give the Board more weapons to  combat current AMC practices.

 

Many thanks to the Board for their consideration and commitment to this important matter. Until recently AMC's were the only participants in the appraisal process void of any regulation.  Successful lobbyist have help create an entity which adds no value to the borrower. AMC's do nothing that  professional appraisers have not or  can not do for themselves. Appraisers are regulated at every turn and there is no logical reason to extend a free pass for AMC's to conduct business as freely as they wish.

In addition to the regulations set forth by the state of Louisiana I ask the board to also consider additional measures. An AMC should be required to provide a copy of their registration with the Commonwealth of Virginia's State Corporation Commission with the engagement letter for every assignment, since it is customary that most appraisers include a copy of their license and E&O insurance with every submitted report. Secondly, require that an AMC provide a current copy of their Dun & Bradstreet comprehensive report and a letter of credit from their bank or financial institution allowing appraisers to attach that account in the event of unpaid invoices. Too many appraisers have been harmed by fraudulent or defunct AMC's. I fully support the regulation of AMC's in the Commonwealth of Virginia and implementation of regulating customary and reasonable fee similar to that of Louisiana.

I support implementing minimum requirements and supervision of appraisal management companies.  Certain AMC's have been taking advantage of honest hardworking appraisers for too long.

Regulations should protect appraisers at all product levels. This includes not only traditional GSE work but also alternative valuation desktop products and IAG evaluations for federally regulated institutions that USPAP also advises us on. Desktop and Evaluation 'clients' (and the third parties to those clients) often take significant advantage of appraisers thinking that only GSE products are covered under the Dodd-Frank Act and the AMC Act, which is not true. A $25 desktop and a $175 URAR are both disgraceful and harmful, not only to our profession but ultimately to the consumer who we are suppose to provide a high level of public trust to. As of 8/2015 the HUD form will be no more, as per the new servicing requirements; the new 'disclosure statement' will list the Appraisal Fee but is not required to list the AMC Fee; yet. When the consumer and the Title Companies are forced to show the AMC Fee on the new disclosure statement all will see how appraisers are taken advantage of on all levels. Let us all stand up and fight to regain our profession through appropriate regulation that protects all those involved.

I support regulation of AMC's in Virginia. Appraisal Management Companies cause high fees to be collected from borrowers for appraisals and because the AMC controls how much of the fee goes to the appraiser, the appraiser gets much less money for the appraisal than before AMC's were created. AMC's cause higher higher appraisal fees to be collected from borrowers and less pay per appraisal to the appraiser. As a result, good appraisers avoid doing work with AMC's and less qualified appraisers get the assignments from AMC's.

AMC's are charging the customer 25% ($500 versus $350 - $400) more per appraisal than prior to the existence of AMC's and paying the appraiser 25% less ($300 versus $400) resulting in more experienced and more qualified appraisers avoiding AMC work while "out of town" far away appraisers and lesser experienced and lesser qualified appraisers doing work for appraisers. A standard and Reasonable and Customary fee based on the standard VA fee for the state should be implemented to stop the enrichment of AMC's at the expense of borrowers and appraisers.

 

The AMCs of today are beginning to push the boundaries of what is ethical. Just as our government has a system of checks and balances in place in order to protect the overall system; I firmly believe AMCs need to be held in check and not be allowed to "run wild". With the limited amount of regulation in place now that is precisely what has transpired. The system is corrupt and needs to be given a make over. It may not be an easy journey; however, all change must start somewhere and I believe this is a great first step. I applaud the actions of those who speak up against the unjust and fight for what is right.

Best,

MAB

There are efficient and fair AMC's working in Virginia that do pay appraisers a reasonable fee, however there are too many AMC's that pay the appraiser much less and cut corners to beat the competition that attract poor appraisals that just put a number on an appraisal with little supporting data and narrative explanation from lesser qualified appraisals that cut corners. AMC regulation should be implemented to ensure a reasonable & customary fee which will result in higher quality and more credible appraisals.

I fully support the regulation of Appraisal Management Companies in Virginia.  In my experience, I have seen these companies take full advantage of hard-working appraisers by paying low fees and placing undue pressure on the appraiser in the form of quick turn times.  When you combine these factors, nothing but below-average quality appraisals can result.  This is not the case for all AMCs in the industry, but it is certainly the majority and not the exception.  Some of the most qualified and best appraisers in the industry have left the profession as a result of the actions of the AMCs.  Other professions are not subject to these actions, as the best of other professions are compensated as such.  In addition to the appraisers being hurt, the consumers are paying higher fees, and receiving lower quality appraisals.  Some AMCs will shop an appraisal at a low fee until someone will accept the assignment.  This isn't the way the business should work, and quality work should be compensated fairly.  When it is all said and done, the two parties who get short-changed are the consumer and the appraiser.  We appreciate any and all consideration to help protect our profession.  Thank you!  

As a certified appraiser in the state of Virginia , I am disillusioned as the direction our industry is taking. Allowing amc's as the middleman in the appraisal process by no means helps John q Public. Low fee's keep qualified people out of the industry and or existing appraiser's to find other profession's. Every year more is being ask of us and to lower fee's does not make sense. Adding another person or entity into the mix in my opinion is most of the time never a good thing.

                                                                                                                     

I support implementing minimum requirements and supervision of appraisal management companies. While there are some efficient and fair AMC's working in Virginia, there are far too many that pay the appraiser much less and cut corners to beat the competition. These companies take full advantage of hard working appraisers by paying low fees and placing undue pressure on the appraiser in the form of quick turn times, that result in below average quiality of appraisals. AMC regulation should be implemented to ensure a reasonable and customary fee which will result in higher quality and more credible appraisals.  

I fully support the regulation of Appraisal Management Companies in Virginia.  Having been in the appraisal business for 20 years, I have seen these companies take full advantage of hard-working appraisers by paying lower than normal fees and placing undue pressure on the appraiser in the form of quick turn times, constant updates, etc.  When you combine these factors, what happens is that experienced appraisers opt out of doing these appraisals for end users that were often times former clients and the AMC's choose less experienced and less qualified appraisers, often times from outside the immediate market area, to perform these appraisals. Ultimately, the consumers are the ones being harmed in this situation. Ironically, the consumers (American tax payers) were the ones trying to be protected with all of the Dodd Frank, HVCC, etc. legislation. Other professions are not subject to these actions, as the best of other professions are compensated as such.  In addition to the appraisers being hurt, the consumers are paying higher fees, and receiving lower quality appraisals.  Some AMCs will shop an appraisal at a low fee until someone will accept the assignment.  This isn't the way the business should work, and quality work should be compensated fairly. We appreciate any and all consideration by the Board to help protect our profession. A review of the State of Louisiana's new AMC License and Regulation Act should be done by the Board. Thank you again for your consideration. 

As a state certified residential appraiser, i fully support the regulation of all AMC's in Virginia. Furthermore, I would also like to see the implementation of regulating "customary and reasonable fees" for all AMC's (as recently passed in Louisiana). Appraisers deserve to be compensated for the quality of their work not by how quickly they turn around an assignment and/or how low of a fee they are willing to accept for an assignment. Thank you for your time and consideration on this matter.

As a state Certified Residential Appraiser, I fully support the regulations of all Appraisal Management Companies in the state of Virginia. I would also like to see the implemention of regulating the customary and reasonable fees for all Appraisal Management Companies as recently passed in the state of Louisiana.

As a certified residential real estate appraiser I fully support the regulation of all AMC's in Virginia and furthermore nationally. An appraisers should be compensated fairly for the qualityo of their work. Assignments are being awarded for who is willing to accept the assignment for the lowest cost instead of the quality of work an individaul appraiser provides. This kind of mindset would devistate any other profession. Thank you for your consideration in this matter.

I fully agree with the regulation of AMCsFrank was implemented, the cost to the consumer tended to increase while the collected fee to the Appraiser tended to do the opposite. The AMCs taking their piece of the pie resulted in an even lower fee for the men and women doing the actual work. There is now a used car buyer mentality among the AMCs when shopping for an Appraiser. We look to USPAP every day and abide by it. ~ 2 inches thick and an Appraiser's Bible of sorts, guiding us in ethics and performance of our profession so as to create a credible product for the client. Add to this a 5-12 page engagement letter full of hoops to jump through, automated emails waking you at 2am, and a hoop jumping "scorecard" for your file with the AMC, and the end result is more work and less pay for the Appraiser and a higher "APPRAISAL FEE" for the consumer. We should not be paying 35% of the "APPRAISAL FEE" to a third party regulator that isn't regulated themselves. More quality Appraisers are leaving the profession, and fewer are coming in. I personally would not come fresh out of four years of college tomorrow and look at a profession that requires the additional hours it takes to become certified as an Appraiser for the pay currently offered in my state. It is my love for what I do that has kept me hoping the profession would eventually see a turn around with the AMCs understanding the long term need for quality work and fair pay to the people that provide that quality work to them. Please consider the impact on Real Estate and the economy of Virginia if we do not have quality Appraisers providing this very important element of the mortgage process in the coming years. Thank You. Rusty Gwaltney

I support regulation of AMC's in the state of Va.  AMC's typically use the appraiser that takes the assignment for the lowest fee and fastest turntime.  This is not providing the lender with the most reliable appraisal in many instances.  Because I do not accept "basement bargain fees"  I lose many appraisal assignments to the lowest bidder.  Appraisers are requlated therefore, the people reviewing our work should also be regulated.

 

 

A regulation requiring customary and reasonable fees is mandated by the failure of the government and banking and real estate industries to provide protection in the form of reasonable compensation to real estate appraisers.  After decades of receiving fees from $350 to $600 for appraisals, we are now asked to work for $200 to $250 while the AMC pockets the remainder.  Veterans Affairs (VA) appraisals are still at $350.  Appraisal fees have not decreased, the AMC is just taking 50% or more.  As a result, those appraisers who are least competent and will do the work for the lower fees are getting the work and producing lower quality products.  The entire industry has suffered, and will continue to do so unless the government steps in and makes these AMC's pay reasonable fees.  $350 is minimal.  For larger properties above 4,000 square feet of gross living area, it should be significantly higher, $450 to $600.  Anything less is a disservice to the profession.

In addition, it should be stated on all appraisals what actual fee was received by the appraiser, and how much went to the AMC.  What you immediately see is that the client (homeowner, bank, etc.) is still paying a fee of $400 to $600 while the AMC pockets 50% or more while hiring the lowest bidder to do the appraisals.  The best appraisers who can afford to quit are leaving the industry or performing appraisals that are not mortgage-related.  The best appraisers who cannot afford to quit are getting kicked in the teeth.  Only the AMC profits, as well as some lenders, since the lending institutions often own the AMC as well.  Like everything else, government intervention, starting with Andrew Cuomo as the former New Your attorney general attacking Fannie Mae, has resulted in the destruction of a program and process that was working properly.  AMC legislation is crucial. 

Thank you.

Since the passage of Dodd Frank I have been on the AMC treadmill. I am making 20-25 percent less than I was 15 years ago while do 50 percent more on the scope of work.  I don't know of any other profession or institusion that has been summarliy treated this way, that has the duty of protecting the population in some of their largest finacial transactions.  The banks and the politicians won't.  It's high time the Banks/AMC's stop their unregulated tear on my profession.

The Appraisal sub-committee has just published final rules regarding AMC regulation that are now open for public comment.  The proposed rules clarify an individual states’ RIGHT (and in my view, RESPONSIBILITY) to enact regulation that exceed the minimum requirements of Dodd-Frank.  In addition, the proposed rules clarify that states may also enact their own laws/rules to reasonably enforce the C & R fee requirements spelled out in the Truth in Lending Act Sec 129 (e). I would like the Virginia’s AMC regulations to quote VERBATIMLY the following from LA AMC regulations and Dodd- Frank; an appraisal management company shall compensate appraisers at a rate that is customary and reasonable for appraisals being performed in the market area of the property being appraised, consistent with the presumptions of compliance under federal law. Evidence for such fees may be established by objective third-party information, such as government agency fee
schedules, academic studies, and independent private sector surveys. Fee studies shall EXCLUDE assignments ordered by known appraisal management companies” An appraisal management company shall not include any fees for appraisal management services performed by the company in the amount the company reports as charges for the actual completion of an appraisal by the appraiser. Considering what we’ve gone through since HVCC, it would be ideal for the board to specifically reference acceptableor relevant fee surveys that AMC’s can reference so they can be sure they are in compliance. This will ultimately protect the interest of the Virginia consumers and the appraisal industry.

Dear Members of the VA Real Estate Appraisal Board,

The regulation of (AMC) Appraisal Management Companies is critical to the integrity of the real estate industry in the State of Virginia. Virginia has lagged behind other states that have realized the negative impact the lack of AMC regulation can have on all real estate and lending-related professions. These mainly out-of-state companies have operated with impunity and have irrefutably adversely affected the real estate appraisal profession by dictating lower fees and quicker turn-times which have negatively impacted appraisal quality. The playing field is not level which is precisely why more AMC regulation is imperative. To clarify, most experienced and highly-qualified appraisers understand the scope of work necessary to provide a high-quality appraisal report and will not accept a below-market or below customary and reasonable fee as they realize it is not profitable. Consequently, some AMCs inevitably hire less qualified, less experienced, "industry" appraisers who will give them exactly what they pay for, a low-quality report. This negatively affects the borrower-consumer, the integrity of the loan for the lender, and likely the secondary mortgage market, or the VA, FHA, USDA, Fannie Mae or Freddie Mac. This is a fact of which we understand after living through the recent economic meltdown caused by related issues. While AMCs used to comprise approximately 20% of mortgage-related appraisal volume, it not constitutes over 80% as questionable Federal legislation has permanently altered the structure and environment of the lending and appraisal industries. I ask you, how can a lending-related business that controls the majority of mortgage-related appraisal assignments, not be heavily regulated? AMC regulation should address the issues of Customary & Reasonable fees; timely payment of appraisals fees; maintaining appraiser independence; guidelines for AMC registration with the SCC and other state agencies; bond requirements to assure financial stability as numerous AMCs have gone out of business leaving millions of dollars owed to appraiser, realty agents and other vendors; and minimum professional requirements for review appraisers employed by the AMCs. It is critical that AMCs develop a cost-plus fee structure that adds their fee to their lender client to that of the independent appraiser instead of taking part of the appraiser's fee to increase profitability and that the fee for the AMC is separated from the Appraisal Fee in the HUD-1 Settlement Statement so that the consumer, the borrower who pays these fees, is finally truly aware of what fees they are paying and for what service and to whom they are paying them. RESPA guidelines should require this transparency and state law should enforce it. AMCs should no longer operate with impunity in the state of Virginia. Many other states have been at the forefront on AMC regulation and it is time for Virginia to respond accordingly. Please review the active roster of licensed or certified real estate appraisers in Virginia to understand that hundreds of appraisers have gotten out of the business into more lucrative employment or simply retired earlier than predicted due to the adverse impact of the current environment of the appraisal profession. Moreover, look at how few new trainee licenses or licensed or certified appraisers are coming into the appraisal profession. The aforementioned issues are all related to this trend. Please act now and decisively to positively influence needed changes that are critical to the preservation of the real estate appraisal profession and the soundness and integrity of the real estate and lending businesses in the state of Virginia. In closing, I thank The REAB and DPOR for allowing this public forum to voice legitimate concerns on this matter.

I am alarmed at the new trend of AMCs requiring appraisers to include a copy of their E&O within the body of the appraisal report.  I am equally alarmed at the lack of resistance by both appraisers and the agencies that regulate them to this dangerous practice.  E&O insurance is a very expensive cost of doing business for appraisers, even those that have no complaints on their record. Lenders look at E&O history when determining whether or not to begin a relationship with an appraiser, and complaints and inquiries can show up on an appraiser's E&O history, even when they have been dismissed as unfounded.  In this age of hyper-regulation, any complaint can cause an appraiser loss of business, no matter how frivolous. 

Now consider how dangerous it is for an appraiser to have their PRIVATE E&O insurance information being distributed to every Tom, Dick, and Harry who has no legal right to it.  Federal law requires that the appraisal report be provided to the borrower prior to closing.  Once it reaches the hands of the borrower, it it no longer under the control of the AMC, the lender client, or the appraiser.  We all know that copies of appraisal reports end up in the hands of builders, realtors, homeowners, neighbors, family, etc.  That means that appraisers' private insurance information is being distributed to all those people.  They have the insurer's name, contact information, the amount of insurance carried, etc.  They are not clients or intended users, but suddenly they have the power to easily create huge problems for the appraiser.  The motivation can be nothing more than irritation that a property did not appraise as high as they think it should have.  We live in an incredibly litigious society, with high unemployment and low wages rampant.  Why should appraisers be forced to put their E&O out there like a present under the Christmas tree?

The most frustrating part about this new trend is that AMCs are simply doing this to eliminate a step in the process of what they are responsible to do.  As agents of the lender client, they are being paid to ensure that appraisals they provide meet all USPAP and federal regulations, and that the appraisers they use have the proper license, insurance, etc that the client requires.  The AMCs already have copies of every appraiser's E&O on their panel. In almost every case, an appraiser cannot even apply for an AMC's panel without providing their E&O.  The AMCs already have this information before they send the order, so they do not need to have it embedded in the appraisal report.  They simply don't want to take the time to provide a separate copy to the client when they send the appraisal report.  The gall of this is incredible, considering that the AMC is already taking up to half of the appraisal fee.  This makes the appraiser not only pay the AMC, instead of the lender, it also makes the appraiser do the AMC's job in the process.  I submit that this policy is a direct violation of the Privacy Act, and should be strictly prohibited by our state's AMC regulation.  AMCs should not be allowed to use their virtual monopoly on the residential appraisal market to force appraisers to put themselves at needless risk because they want to save a step and improve their bottom line. 

My second concern is customary and reasonable fees.  The obvious intention of Dodd-Frank was to ensure that appraisers were paid a reasonable fee for the services they provide.  It even clearly stated that AMC fees were not to be considered in this analysis.  The Federal Reserve's Interim Final Rule threw this all out the window at the behest of the bank lobby because the largest AMCsFrank.  They provide only a framework, and then various agencies and unelected bureaucrats and political appointees get to write the "rules" that actually govern.  I urge the Commonwealth to use the proposed AMC regulation to return to the intention of Dodd-Frank. 

This is not to say that I believe a state should be in the business of setting appraisal fees.  Setting fees by regulation is a slippery slope, and I do not believe any person, organization, or government agency should be given the power to tell appraisers what they can charge for an appraisal.  Rather, the free market should determine what an appraiser is paid.  Unfortunately, the free market has been completely destroyed by first the HVCC, and then the distortion of Dodd-Frank.  Since it appears that AMCs are here to stay, and appraisers will never be truly independent again, the only reasonable course to restore some free market competition to the appraisal market is to force AMCs to compete based on their own services and merit.  It is ridiculous that AMCs are paid out of the appraiser's pocket instead of by the lender client that engages them.  This sets up the cycle of "fastest and cheapest" and contributes to the continual decline in appraisal quality, which eventually results in a high percentage of unreliable valuations and weakening of the housing market.  As we saw in 2008, the housing market is a major contributor to the health of the economy as a whole.  When it crashed, everything crashed.  The Commonwealth would be wise to consider the bigger picture of how the current AMC model negatively affects the entire economy of the state. 

The common-sense and cost-effective way for Virginia to begin to correct the serious problem of low fees is to prohibit AMCs from taking their fee out of the appraisal fee at all.  The AMC service and the appraisal report are two distinct and very different products with two different clients.  The fees for each should also be distinct and separate.  The appraiser is not the AMC's client, so why does the appraiser pay the AMC's fee?  The lender is the AMC's client.  Therefore, the lender should pay the AMC's fee.  AMCs should compete based on the value of the service they provide to the lender.  The cost-plus model is the way to encourage competition based on merit and quality... the actual market cost of an appraisal by an independent appraiser PLUS the AMC's fee for the services they provide the lender.  If the appraisal is not part of the determination, then the AMC can only charge for the actual services they provide.  The lender then can make a free-market decision about how much the AMC's services are worth to them.  Is it really worth $200 to have an AMC involved, or would it be more cost effective to develop their own panel of appraisers in compliance with the law?  If an AMC wants to gain client share, then they can make the decision to lower their charge to the lender.  The current system does not work because neither the lender nor the AMC is negotiating with their own money.  They are negotiating with the appraiser's money.  It is beyond me that this has been allowed to continue for so long.  This seems to violate all kinds of anti-trust laws, and would never be allowed in any other type of business. 

I urge that the Commonwealth include in its AMC legislation strict prohibition of AMC fees taken out of appraisal fees.  Customary and reasonable fees cannot be based on the fees currently paid to appraisers by AMCs.  The fee that the borrower actually paid for the "appraisal" is the fee that should be considered in customary and reasonable.  The borrower is told that this is the appraisal fee, and there is no transparency whatsoever that up to half of what they paid went to an AMC and never reached the appraiser at all.  The borrower pays $400 to $500 for the appraisal, but the appraiser typically gets $250 to $275 for doing all the work, putting their private E&O on the line, and signing a certification taking responsibility for just about everything the AMC was supposed to do.  The VREAB will have a complete list of the appraisals ordered and the fees paid by each AMC as part of the new regulation.  Once AMC fees are forced to be separated from the appraisal fee, appraisers will be more able to compete based on their quality and service instead of based on how much of the appraisal fee they can afford to hand over to the AMC.  Once the two fees are separated, the argument about what is customary and reasonable can actually take place.  Currently, it is not even possible to debate the value of apples versus oranges because we are conflating two very different services. 

 

 

I would like to thank you for taking the time to look into this matter that affects all appraisers in this industry. AMC regulation is not just a topic in my office but also throughout many offices throughout the state. Many feel that there needs to be set standards for AMC's and I definitely agree with this. We as appraisers are held to high standards and regulations and I feel it's time AMC's are held to similar if not even higher standards. In recent years, the criteria for becoming an appraiser has become more rigorous. Depending upon the level of certification, one must obtain various levels of college education. Regulations of AMCs will assist in holding our profession to high standards. We have seen many AMC's conduct business in our state for many months and then close their doors without fulfilling their commitments to appraisers. There are numerous AMC's across the country that conduct business in our state that have been professional to work with. I feel if new regulations are passed, this would allow for more positive experiences with all AMC's. Other states have regulations for AMC's and now is the time for Virginia to follow along. Hopefully in the future Virginia can be a leader in regards to other professional matters like this. Again, thank you for considering  these regulations and know you have the support not only from me but from many other appraisers across the state! Thank you!

 

I am in favor of AMC regulation in Virginia.  While I understand that it is difficult to set one standard fee, we all know how much the consumer is paying for a typical appraisal.  Appraisal fees should be based on the $400 to $600 that borrowers are currently paying their lender for their appraisal.  It makes no sense that the appraiser, who does all of the work required to complete a credible appraisal nowadays, is only being paid a portion of what the borrower is paying for the service.  Most of the AMC's currently in business are taking huge chunks of the appraisal fee, while they do absolutely nothing.  Most of us in this profession are college educated people, that got into the industry years before these AMC's where given an opportunity to take over.  What college educated person in their right mind is going to spend years training and thousands of dollars on appraisal education, in order to enter into an industry that is being squeezed by management companies taking 50% of the current fees?  Appraisers are working harder than ever and yet the pressure to complete an assignment faster and for less continues to get worse.  I truly appreciate the opportunity to voice my opinion and hope that Virginia will follow in Louisiana's footsteps by providing regulation that is desperately needed in our state.

 

Thank you,

Reid Adams

As a Certified License Appraiser, I want to express my support for AMC regulation and appraisers being paid reasonable fees for their appraisal services performed. The need for regulation and appropriate fees is a much needed industry requirement that should be taken seriously. Both Lenders and AMCs should support the need for experienced and professional appraisal work. The fees paid to appraisers should be set by the appraiser not a "middle man".

Having been a broker/owner and certified residential appaiser for many years, there is absolutely no question in my mind that AMC regulations are mandatory and totally necessary.   Without simply echoing the many comments of the appraisers and others on this "town hall" forum, I can only say without regulation and "common sense" rules & regulations", the appraisal industry as we have known it for so many decades, will continue to delcine in credibility and competence if it continues along the AMC non-regulated path.  Even if the monetary fee issue was taken out of the equation, the current logistical methodology of AMC appraisal assignments and all the "issues" which go with the sequence of events from the appraisal order "offer" to the final report submission, is flawed and needs to be fixed sooner than later...and not just for the sake of the lenders whose loans are collateralized by the properties appraised, but for the sake of the general public.

I strongly support AMC regulation in Virginia.  The AMCs have been thrust into the market as a middle-man, increasing the cost to the consumer and offering no added value to the consumer or to the industry. AMCs are notorious for hiring appraisers for the lowest fee and quickest turn-around, not necessarily for their expertise or knowledge.  Furthermore, I fear that unregulated AMCs will have a long-term negative impact upon the appraisal industry due to barriers to entry for the profession.  There are very few entering into the profession, and many appraises are retiring due to the increased workload and lack of adequate compensation.  As an appraiser for over 20 years with an Economics degree from Duke and MBA from Vanderbilt, the current fee structure of most AMCs is no longer commensurate with the work and liability demanded.  There is a mandated minimum level of compitency required to be an appraiser, and I believe a minimum fee schedule should be established commensurate with those professional requirements. I appreciate the opportunity to comment on this pending regulatory action.

I am a certified residential appraiser with 25+ years of experience. Without a doubt the AMC's have brought down the appraisal industry with the non-legislative implementation of HVCC in May 2009 by Andrew Cuomo (NY State Atty General). As a result our business models were ripped out from us and our ability to perform as licensed professionals in our country's free enterprise system was severed. The consumers are paying more for appraisals due to the 'middle man' AMC's who bring minimal if any value to the appraisal process. The accelerated existence of AMC's have cost the consumer more with predominantly less quality. In the meantime the licensed appraisal professionals are leaving the industry due to the low AMC fees and quick turn times none of which nurture quality. Not only is it time to regulate the AMC, it's also time to give back the business models to the professional appraisers. The consumers and lending profession deserves to have this happen. We're losing so many of our professionals leaving behind the less experienced and less qualified appraiser. We're also losing professionals that have years of experience that few are passing along to those who want to enter the appraisal industry. The AMC's have clearly been a detriment to our appraisal industry with a significant trickle down effect on the consumers and overall lending industry. Not only should the AMC's be regulated - let's give the business models and free enterprise system back to our appraisal profession.