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Kroll Bond Rating Agency (KBRA) releases a report on the acceleration in 2020 of Appraisal Reduction Amounts (ARAs), as well as our analysis of whether they are a good indicator for predicting CMBS loan losses.
ARAs, which serve to limit servicer advances, are also a key factor used to determine shifts in a securitization’s controlling class. KBRA recently reviewed ARAs across the CMBS 2.0 conduit universe, with some of the report’s key observations as follows:
409 ARAs have been effectuated year-to-date (YTD) through November 2020 on CMBS 2.0 conduit transactions. This is 3.7 times higher than the number (111) in full year (FY) 2019.
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KBRA Releases Research - ARAs Surge: Are They a Good Proxy for CMBS Loan Losses?
January 8, 2021 GMT
NEW YORK (BUSINESS WIRE) Jan 8, 2021
Kroll Bond Rating Agency (KBRA) releases a report on the acceleration in 2020 of Appraisal Reduction Amounts (ARAs), as well as our analysis of whether they are a good indicator for predicting CMBS loan losses.
ARAs, which serve to limit servicer advances, are also a key factor used to determine shifts in a securitization’s controlling class. KBRA recently reviewed ARAs across the CMBS 2.0 conduit universe, with some of the report’s key observations as follows: