The Team from KBRA On ARAs

3/31/2021  ·  by CRE Finance Council  ·  Multifamily  ·  Research and Background Documents

In early January, Kroll Bond Rating Agency (KBRA) published a report on the surge in appraisal reduction amounts (ARAs) that were observed year-to-date (YTD) through November 2020. In the report, KBRA noted that a recent climb in ARAs was expected due to an increase in specially serviced loans and commercial real estate (CRE) valuation declines. Further, about one-half of the ARAs initially effectuated over KBRA’s study period appeared to have been Automatic (Auto) ARAs. In this report, we provide an updated analysis with data through February 2021, as well as an increased focus on Auto ARAs.

Tags: Appraisal  ·   reduction  ·   valuation  ·   ARA  ·