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Posted: 25-06-2013 09:54 Post subject:

Poor maths skills linked to mortgage defaults
Being bad at maths could end up costing you your home, say scientists.
By Radhika Sanghani
8:16AM BST 25 Jun 2013

People with poor maths skills are more likely to be behind with their mortgage payments and have their home repossessed, according to a study.
It shows the risk of defaulting on a mortgage is directly linked to a home owner's maths skills and could explain the mortgage defaults in the recent global crisis.

Professor Lorenz Goette, its author, urged mortgage lenders to offer “mortgage counselling” to those who struggled with mathematical skills.
"Anyone can screw up, whether they are rich or poor," Professor Goette at the University of Lausanne, in Switzerland, told The Times. "We need to think about whether we can teach people to avoid these mistakes."

The study, published in the Journal Proceedings of the National Academy of Sciences of the United States of America, indicated owners’ poor maths skills could have contributed to the mortgage defaults that led to the recent global financial crisis.

It questioned 339 subprime borrowers in the US who took out their loans between 2006 and 2007, and assessed each individual's numerical abilities in a telephone survey.
The questions involved calculating percentages and the basics of compound interest - the idea that the lump sum on which the interest is calculated changes each year.
Professor Goette said: "It's quite surprising how many people get these wrong.”

Borrowers who did least well at the maths test spent about 25 per cent of the time in arrears on their mortgage payments compared with only 12 per cent for the top group.

The results were not simply explained by people who were good at maths also being those who were better off.
Economists said that people with worse numerical abilities appeared to have got worse mortgage deals, but that this explained only about one third of differences between the best and worst performing groups.
Budgeting problems and an overall lack of understanding about the mortgage they had taken out were also likely to have played a part, the researchers said.

Professor Goette said: "It's always possible for people to spend too much, regardless of their income.
“Recent studies have found changes in financial education curricula in high schools have important effects on financial decisions later in life, that foreclosure counselling can reduce incidences of foreclosure and mathematical skills in general may be more malleable and less genetically driven than previously thought.
"If financial education can reduce sub-optimal financial decision making, this could have profound effects on household behaviour, as suggested by our results."

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10140287/Poor-maths-skills-linked-to-mortgage-defaults.html

Posted: 15-07-2013 07:35 Post subject:

Cambridge University's Plus magazine

Posted: 01-08-2013 12:33 Post subject:

This does involve a bit of statistics, but mainly I couldn't think where else to post it! Wink

Easy as 1234: the most popular PIN codes revealed
As anyone with more than one bank card will know, remembering a variety of PIN codes can be an impossible task.
By Rosa Silverman
9:35AM BST 01 Aug 2013

It should perhaps comes as no surprise, therefore, that the most popular PIN in use has been found to be 1234. Rolling Eyes

While some of us devise crafty combinations of numbers based on our pet’s birthday or the date of our wedding anniversary, research suggests that many people simply opt for the most memorable code they can think of.

A study by the DataGenetics blog found the second most popular PIN was 1111, followed by 0000, 1212 and 7777.

The digits zero to nine can be arranged in 10,000 possible ways to form a four-digit PIN code.

But using data from security breaches and previously released or exposed password tables, the bloggers found that 11% of the 3.4 million passwords they looked at were 1234 – a proportion they described as “staggering” and betraying a "lack of imagination."

More than six per cent of the passwords were 1111.

Many people also used the year of their birth to create their PIN, with every single combination of the digits in the years 1901 to 1999 occurring in the top fifth of the data set.

The least common PIN code, meanwhile, was 8068, which occurred just 25 times in the study of 3.4 million codes.

The bloggers warned that anyone with one of the most popular PINs should “apply common sense and immediately change them to something a little less predictable.”

Their research follows a cybercrime report in June revealing that criminals can buy personal details online for less than £20.
Credit card details without PINs can be purchased for just £16, while a PIN costs £65. A credit card with PIN and a guaranteed good balance sells for £130, according to the security software company McAfee.

http://www.telegraph.co.uk/technology/internet-security/10215714/Easy-as-1234-the-most-popular-PIN-codes-revealed.html

I have two PINS, and both are unchanged from the ones provided by the card issuers. One is quite easy to remember, as the first three numbers are the sail number of a boat I used to sail, and the fourth number is found by a simple mathematical operation on the first three! (I can't tell you the mathematical operation because that would enable you to narrow down the possibilities!)

The other PIN is not so easy to remember, but I get it by using 'muscle memory', my fingers remembering where the buttons are on the keypad. Cool

Posted: 05-10-2013 04:51 Post subject:

I've also posted this on the Simpsons thread.

Heard about this on t'wireless last week so it's good to read it in tGrauniad too:

The Simpsons' secret formula: it's written by maths geeks