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Characterisation of Conditional Foreclosure Likelihood: Significance of Equity, Firm, Number of Co-Borrowers and size to Arm For

Author/s: Neo Poh Har, Ong Seow Eng, Ho Kim Hin

Date Published: 1/01/2003

Published in: Volume 9 - 2003 Issue 2 (pages 121 - 147)

Abstract

This paper establishes the prognostic variables influencing foreclosures for Singapore residential properties through the building of three probit models – one for all property types, the second for high-rise properties and the third for lowrise properties. A total of four variables are found to be statistically significant in all three analyses. Equity and the size of the property are found to have a positive influence on the likelihood of foreclosure. A negative relationship is found with firm as a type of purchaser and the number of co-borrowers with respect to the foreclosure likelihood. In general, it has been found that the foreclosure likelihood does not change significantly with changes in the economic environment.

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Keywords

Default Option Value - Foreclosure - Holding Duration - Probit Model - Repeat Sales

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