A new study has found that Americans who have trouble dividing 300 by 2 are more likely to end up in foreclosure than those consumers with average math skills. According to the study’s authors, the research is among the first to directly link mortgage trouble to ‘financial literacy.’ The study also revealed that math skills were a better predictor of foreclosure than the type of mortgages available, which takes some of the blame away from so-called ‘risky’ mortgages.
The study examined actual mortgage payment streams obtained from the Federal Reserve, and then contacted mortgage holders to assess their math skills. Each was asked a series of five basic math questions; the answers were then assigned into four “buckets.” Four of those questions tested the ability to perform simple division or calculate percentages, like: “A shop is selling all items at half price. Before the sale, a sofa costs $300. How much will it cost in the sale?” Roughly 1 in 7 test-takers could not answer even two such questions correctly, and landed in the lowest bucket. That group was four times more likely to be in foreclosure than consumers who landed in the top bucket by answering all five questions correctly.
The researchers also went to great lengths to control outside factors, such as income, overall education level, IQ, and type of mortgage. Math skills had the most pronounced effect on likelihood that consumers would end up in foreclosure. For example, homeowners with no college degree but high math skills performed better than college graduates with poor math skills.
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the website, www.miamibankruptcy.com.