Framework for measuring the efficiency and efficacy of sale of distressed mortgaged properties using imports of statistical tests deployed in clinical studies

Joseph Obaje Ataguba () and Celestine Udoka Ugonabo ()
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Joseph Obaje Ataguba: The Federal Polytechnic Idah
Celestine Udoka Ugonabo: Nnamdi Azikiwe University

SN Business & Economics, 2023, vol. 3, issue 8, 1-32

Abstract: Abstract We developed analytical frameworks for measuring and testing the efficiency and efficacy of distressed mortgaged property sales using statistical tools deployed in clinical trials. The first framework proposes efficient sale of distressed mortgaged properties on the condition that the number of distressed properties sold during an epoch exceeds the number of unsold distressed properties during the same epoch; whereas, the second framework proposes the potency of distress mortgaged property sales on the condition that the actual sales price of the property can successfully liquidate the outstanding loan and accumulated interest charged against the mortgaged property/asset. Within the context of the analytical frameworks for this study, we demonstrated the assessment of efficiency and efficacy of distressed mortgaged property sold using private treaty listings as well as appropriate parametric and non-parametric statistical tests. It was observed that the efficiency of distressed mortgaged property sales could be measured using the difference between volume of sold and unsold properties during an epoch contrary to the concept of time-on-the-market (TOM) that lacks a scholarly consensus regarding standard measure to avow efficiency or otherwise of the sales. Efficacy assessment in this context has accorded inferential statistical dimension to the measurement of the success or failure of non-recourse debt recovery. Beyond the illustrative simulation exercise in this study, it is recommended that further studies on the subject should deploy actual data cutting across the three methods of distressed sales, namely private treaty, tender/competitive bidding, and auctions, respectively, so that comparisons could be made across these methods.

Keywords: Mortgaged properties; Debt recovery; Distressed sales; Efficacy of sale; Efficiency of sale (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s43546-023-00513-5

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