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A Duration Analysis of Foreclosures to Sheriff Sales in Light of the Financial Crisis

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  • Kashian, Russell
  • Cebula, Richard
  • Peterson, Jeremy

Abstract

The purpose of this paper is to address the efficiency of turning over homes that have gone into foreclosure. For the town of Muskego, Wisconsin, the number of homes going to foreclosure has decreased from the pinnacle of the housing crisis. Furthermore, the likelihood of a house going to sheriff sale after being foreclosed upon has gradually decreased from this point in time as well. This paper employs a probit model to determine the likelihood that a foreclosed home will go to sheriff sale compared to the reference years (2001-2004). From the initial stages of the housing crisis, homes in foreclosure were more likely to go to sheriff sale compared to the reference years, but this effect diminishes over time. Furthermore, a hazard model is implemented which confirms the results of the probit from a duration perspective.

Suggested Citation

  • Kashian, Russell & Cebula, Richard & Peterson, Jeremy, 2015. "A Duration Analysis of Foreclosures to Sheriff Sales in Light of the Financial Crisis," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(2).
    • Handle: RePEc:ags:jrapmc:243987
    DOI: 10.22004/ag.econ.243987
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    References listed on IDEAS

    as
    1. Anthony Pennington-Cross, 2010. "The Duration of Foreclosures in the Subprime Mortgage Market: A Competing Risks Model with Mixing," The Journal of Real Estate Finance and Economics, Springer, vol. 40(2), pages 109-129, February.
    2. repec:rre:publsh:v:39:y:2009:i:1:p:9-22 is not listed on IDEAS
    3. Foote, Christopher L. & Gerardi, Kristopher & Willen, Paul S., 2008. "Negative equity and foreclosure: Theory and evidence," Journal of Urban Economics, Elsevier, vol. 64(2), pages 234-245, September.
    4. Allen F. Jung, 1962. "Terms On Conventional Mortgage Loans On Existing Houses," Journal of Finance, American Finance Association, vol. 17(3), pages 432-443, September.
    5. Richard A. Phillips & James H. VanderHoff, 2004. "The Conditional Probability of Foreclosure: An Empirical Analysis of Conventional Mortgage Loan Defaults," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(4), pages 571-587, December.
    6. Brent W. Ambrose & Charles A. Capone, 1998. "Modeling the Conditional Probability of Foreclosure in the Context of Single‐Family Mortgage Default Resolutions," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(3), pages 391-429, September.
    7. Harding, John P. & Rosenblatt, Eric & Yao, Vincent W., 2009. "The contagion effect of foreclosed properties," Journal of Urban Economics, Elsevier, vol. 66(3), pages 164-178, November.
    8. Dennis Capozza & Thomas Thomson, 2006. "Subprime Transitions: Lingering or Malingering in Default?," The Journal of Real Estate Finance and Economics, Springer, vol. 33(3), pages 241-258, November.
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    10. von Furstenberg, George M & Green, R Jeffery, 1974. "Home Mortgage Delinquencies: A Cohort Analysis," Journal of Finance, American Finance Association, vol. 29(5), pages 1545-1548, December.
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    Cited by:

    1. Sorenson, David J., 2015. "Loan Characteristics, Borrower Traits, and Home Mortgage Foreclosures: The Case of Sioux Falls, South Dakota," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(2).

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