hard · Asset-Backed Securities asset-nuances
A CMBS conduit trust holds a $20M loan that has defaulted. The master servicer has advanced $1M in interest. A new appraisal values the property at $14M, and liquidation expenses are estimated at 10%. Calculate the Appraisal Reduction Amount (ARA) used to determine the reduction in subsequent interest advances.
- $8.40M
- $7.40M
- $7.00M
- $6.00M
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