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.