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September 26, 2016
MILWAUKEE — Two Marquette University real estate professors were honored recently by the American Real Estate Society for having best papers in the organization's 2016 Manuscript Prize Competition.
Dr. Anthony Pennington-Cross, professor and chair of finance, won in the Real Estate Finance category for his paper, "Mortgage Loss Given Default: Loss on Sale and Lost Time," and Dr. George Cashman, associate professor of finance, took top honors in the Real Estate Portfolio Management category for "Cross-Border Investment and Firm Liquidity."
Pennington-Cross' paper examines losses on defaulted mortgages, particularly the financial losses incurred in the sale of the property, as well as the opportunity costs resulting from lost time. The study found that the loss on the sale and the amount of time that a loan is in default before resolution have substantial variation across space (state and metropolitan areas) and over time (during the housing run-up, collapse and recovery).
"While loss rates on sales have been declining after the recession, the default timeline (the time from the last payment to loan resolution through sale) has been declining much more rapidly," Pennington-Cross wrote. "In fact, the default timeline is shorter in 2012 and 2013 than it was in any time during the 2000s."
According to Pennington-Cross, the paper's findings can help lenders and their regulators design more effective loss given default models that are crucial for estimating needed economics and regulatory capital requirements.
Cashman's paper examines whether, and to what extent, information barriers associated with exposure to geo-political risk and uncertainty influence the liquidity of publicly traded real estate firms across the Asia-Pacific region. In short, the results provide strong evidence that geo-political risk factors do negatively impact the financial market liquidity of real estate firms in that region.
"Investing in countries with economic systems, regulations, and/or other policies which facilitate and enhance the generation, collection, and dissemination of information regarding firm activities tends to enhance financial transparency, thus increasing firm liquidity," Cashman wrote.
According to the ARES, more than 230 papers were presented at its annual meeting. One-hundred fifty-three were subsequently revised and submitted for consideration as a "Best Paper" recipient in one of 21 categories. Submissions in each category were then evaluated by an expert panel of judges with unique knowledge of that area. In each prize category, feedback was sought from at least three judges, with several categories requiring multiple rounds of evaluation to determine an ultimate winner.
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