ARA stands for Appraisal Reduction Act. When a loan is in default, an appraisal is ordered. If the appraised amount is less than the debt, an “appraisal reduction” is booked that would be equal to the difference between those two amounts. The ARA was enacted to ensure that servicers can continue to keep bondholders current on advances, even when a loan is in default. Please don’t hesitate to contact us at no obligation with questions about the ARA or any other CMBS loan issue.
(817) 756-7227
