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Study suggests math skill-foreclosure risk linkage

Many of our Texas readers may likely welcome the news that being bad at math is not necessarily an indicator of low intelligence. It may, however, be an indicator that a person, if that person is a homeowner, may be at higher risk of being faced with the challenges of foreclosure.

At least, that's the conclusion of a study recently published in the journal Proceedings of the National Academy of Sciences. Acknowledging the fact that the recent collapse of the housing market and the flood of foreclosures has been linked back to the overuse of subprime mortgages, the researchers set out to determine whether bad math skills among borrowers might have also played a role.

They weren't looking for cause and effect, merely a possible relationship. And they say they think they found one.

What they did was interviewed some 300 individuals who took out subprime mortgages in 2006 and 2007. In the course of the interviews, the respondents were asked five word problems to test their ability to do some basic calculations. The easiest question asked what would be paid if a $300 sofa was on sale for half price. Each subsequent problem got a little harder.

Then the researchers looked at which of the respondents ended up in foreclosure and they found that 20 percent of the people who did poorly on the word problems suffered foreclosure, while only 7 percent of those with the high scores ended up in that situation.

What they further concluded was that the key difference between the two groups was that those who displayed higher math skills were better prepared to weather unexpected financial shocks such as the loss of a job or massive medical costs.

Indeed, it is just those kinds of conditions that can lead to a foreclosure. But staving off such action is possible, too. Learning what options may be available in that regard is something best done through consultation with an experienced bankruptcy attorney.

Source:, "Could Poor Math Skills Raise Your Risk for Foreclosure?," Brenda Goodman, HealthDay News, June 24, 2013

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