Alan Teo Hwee Loon, our MSc (Estate Management) graduate, garnered the 2005 ARES Journal Manuscript Prize for the best study published in the Journal of Real Estate Portfolio Management in 2004. His paper on "Delinquency Risk in Residential ARMs: A Hazard Function Approach” was published in the Journal of Real Estate Portfolio Management, Vol. 10 No. 3.

The Executive Summary of the article is reproduced below:

“Delinquency risk is a major area of concern to mortgage lenders and underwriters of Mortgage-backed Securities (MBS). Utilizing the hazard function approach, this paper provides an analysis of the characteristics and duration of delinquency risk of residential adjustable-rate mortgages (ARMs). Results show that mortgages with average ages of around ten and twelve years have the greatest likelihood of going into delinquency. Results also show that lenders’ emphasis on borrower characteristics has been misplaced. Instead, uncontrollable mortgage-specific and macroeconomic characteristics are more significant in affecting delinquency incidence. This critically impairs lenders’ ability to mitigate delinquency risk in their mortgage portfolio and hinders MBS underwriters’ attempts to package good quality mortgages for securitization.”