Many Seattle residents will want to hear about a new foreclosure study performed by Princeton University researchers. They interviewed 300 people -- all of which obtained a subprime mortgage in 2006 or 2007 -- garnering some background information about their financial situation. Then, they gave them a math test that consisted of five questions. The questions dealt with some basic math principles, but they mostly centered on percentages.
Researchers thought they would find a link between an individual's math skills and the quality of the loan they obtained. Namely, they thought bad math skills would mean a bad loan.
However, what they discovered is that there is a link between a person's math skills and the likelihood that person's home gets foreclosed on. People who scored "low" on the test were nearly three times more likely to have a foreclosure than those who scored "high" on the test.
While this may not be too surprising of a result, it is something that homeowners should be concerned about. Dealing with numbers and performing basic elements of math are central to mortgages and foreclosure; and when done poorly, an individual can experience some very trying times.
So what kind of options does someone have if they are in dire financial straits with their home? Well, there are many options and it all depends on each person's unique case.
There are a couple of basic things to know though. A bankruptcy filing can prevent a foreclosure; and even if your home goes into foreclosure, a bankruptcy filing can help you clear out other debts so that you can get back on track financially.
Source: Business Insider, "People With Bad Math Skills Are More Likely To Wind Up In Foreclosure," Mandi Woodruff, June 27, 2013