Connect with us

Bad Credit

Coronavirus Spreadsheet Errors Are Deadly but Worryingly Normal

Published

on

Imagine that you’re working in a government subdepartment that tracks coronavirus infections and traces the patients’ contacts. You’ve just discovered that nearly 16,000 positive tests didn’t get into the system for a week. The people with the coronavirus know they have it, but their contacts don’t know. What do you do?

We don’t have to imagine it. In the United Kingdom, 15,841 people with coronavirus infections went unreported to Serco Test and Trace, the company running the U.K. government’s coronavirus tracing program, in the week from Sept. 25 to Oct. 2, with 48,000 of their possible contacts not warned—because of errors in a data import.

Patients were told they had tested positive, but their details weren’t passed to contact tracers until 1 a.m. U.K. time on Oct. 3, and the cases were not added to official totals until Oct. 5. The cause was simple: a mistake between different formats of Excel files. The U.K.’s response to COVID-19 is widely regarded as scattershot and haphazard. So how did they get here?

Excel is a top-of-the-line spreadsheet tool. A spreadsheet is good for quickly modeling a problem—but too often, organizations cut corners and press the cardboard-and-string mock-up into production, instead of building a robust and unique system based on the Excel proof of concept.

Excel is almost universally misused for complex data processing, as in this case—because it’s already present on your work computer and you don’t have to spend months procuring new software. So almost every business has at least one critical process that relies on a years-old spreadsheet set up by past staff members that nobody left at the company understands.

That’s how the U.K. went wrong. An automated process at Public Health England (PHE) transformed the incoming private laboratory test data (which was in text-based CSV files) into Excel-format files, to pass to the Serco Test and Trace teams’ dashboards.

Unfortunately, the process produced XLS files—an outdated Excel format that went extinct in 2003—which had a limit of 65,536 rows, rather than the around 1 million-row limit in the more recent XLSX format. With several lines of data per patient, this meant a sheet could only hold 1,400 cases. Further cases just fell off the end.

Technicians at PHE monitoring the dashboards noticed on Oct. 2 that not all data that had been sent in was making it out the other end. The data was corrected the next day, and PHE announced the issue the day after.

It’s not clear if the software at PHE was an Excel spreadsheet or an in-house program using the XLS format for data interchange—the latter would explain why PHE stated that replacing it might take months—but the XLS format would have been used on the assumption that Excel was universal.

And even then, a system based on Excel-format files would have been an improvement over earlier systems—the system for keeping a count of COVID-19 cases in the U.K. was, as of May, still based on data handwritten on cards.

PHE was initially blamed for the data disaster. But the question to ask when a procedure leads to disaster is: What problem was the procedure supposed to solve in the first place? PHE’s process was broken in multiple ways; why did it exist at all?

The process that went wrong was a workaround for a contract issue: The government’s contract with Deloitte to run the testing explicitly stipulated that the company did not have to report “Pillar 2” (general public testing) positive cases to PHE at all.

Since a test-and-trace system is not possible without this data, PHE set up feeds for the data anyway, as CSV text files directly from the testing labs. The data was then put into this system—the single system that serves as the bridge between testing and tracing, for all of England. PHE had to put in place technological duct tape to make a system of life-or-death importance work at all.

Right now, Public Health England has worked around the present problem: Serco Test and Trace still takes an Excel 2003-formatted XLS spreadsheet as part of the data pipeline—but the process now uses multiple sheets, so the files don’t overflow again.


The U.K. government has used wide-ranging outsourcing to the private sector to build a COVID-19 response system quickly. But outsourcing is fraught with hazards of exactly this kind, where faulty systems are created to get around regulatory problems or cut corners

A shortage of home testing kits led to the government worrying that people would request multiple kits. Identity verification was outsourced to the credit agency TransUnion—which implemented it by running credit checks. People who couldn’t pass TransUnion’s particular credit checks were refused tests, including many who had bank accounts and were on the electoral roll, and so should have been entirely verifiable as being real people. There are 5.8 million U.K. residents who have bad credit histories and so could be refused a test kit, which disproportionately impacts the already poor and disadvantaged—with obvious implications for public health.

Many of those rejected by the credit check were told to visit testing centers at the other end of the country, such as London residents being told to go to Scotland for a test. One London resident was advised by staff at a testing center to say she lived in Aberdeen, Scotland—and this got her a test in London.

The Brookings Institution report Doomed: Challenges and solutions to government IT projects lists factors to consider when outsourcing government information technology. The outsourcing of tracking and tracing is an example where the government has assumed all of the risk, and the contractor assumes all of the profit. PHE did one thing that you should never do: It outsourced a core function. Running a call center or the office canteen? You can outsource it. Tracing a pandemic? You must run it in-house.

If you need outside expertise for a core function, use contractors working within a department. Competing with the private sector on pay can be an issue, but a meaningful project can be a powerful incentive.


This sort of error doesn’t have to happen. There’s a set of basic principles to apply for vital functions when you’re working within an unreliable organization. Site Reliability Engineering principles are lifesavers when you’re short on both human and technical resources.

The first step is fully understanding your task. Document what you need. Document whether you can get it or not. Set explicit priorities, and get signoff. Document when there are requests to drop a priority because of lack of resources.

If the data import from the labs had been checked daily, the problem would have been noticed and solved immediately. Are you cross-checking your numbers? Do you have a list of the numbers that need to be verified—and do you know what “normal” numbers look like? If you can’t get the people you need to do this work, have you documented the refusal?

Consider your software support. In the U.K., the Government Digital Service, part of the Cabinet Office, uses LibreOffice, the current version of the old OpenOffice. LibreOffice is free, though you can buy support easily. The Government Digital Service is on the advisory board of the Document Foundation, the nonprofit behind LibreOffice. The LibreOffice spreadsheet also automatically corrects math bugs in Excel—a function that gives the same wrong answer as Excel will have a corresponding function that gives the correct answer.

Document your duct tape stopgap solutions. Document and request the support that you need to do the job robustly—and document it being refused. If spreadsheets are all you have, send your staff on training courses. Training and caution are much cheaper than a widely publicized disaster. Particularly when lives hang in the balance.

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Bad Credit

European Regulator Worries Banks Are Ignoring Borrower Troubles

Published

on

The European Central Bank is worried lenders in the eurozone aren’t properly evaluating the impact of the coronavirus pandemic on the financial health of borrowers, a problem that could result in a sudden cascade of defaults.

Andrea Enria,

head of banking supervision at the ECB, said banks are setting aside less money to cover for loan losses than peers in other countries, including the U.S. He added that the provisions are below levels reached during the financial crisis and short of the levels models suggest are required.

“The way in which banks are preparing for asset quality deterioration varies widely and could, in some cases, be insufficient,” Mr. Enria said Thursday.

He expects the impact of renewed lockdowns will be reflected in banks’ fourth-quarter results and through 2021. Several eurozone banks are due to report their annual results next week.

The true health of eurozone borrowers has become harder to track due to the amount of financial support from the ECB and the region’s governments, which includes payment holidays on existing loans. In Italy, for instance, over a quarter of loans to businesses are under payment moratoriums. In Portugal, half of the credit to companies in the hospitality and restaurant sectors are under the program.

State guarantees on loans have also incentivized eurozone banks to continue lending, including to small companies that would likely go bust without that help.

Mr. Enria said that while the support is likely helping banks to keep their loan books healthy, there are signs lenders aren’t properly looking at the personal situation of the borrowers who received support.

“Since March last year we told banks that they should develop additional indicators to try to understand the quality of their customers and to see through the moratoria,” Mr. Enria said. “We are not seeing a lot of that happening,” he said.

The ECB earlier last year said bad loans in the eurozone could soar as high as €1.4 trillion, equivalent to $1.7 trillion, if the economies were to contract more than expected, a scenario the central bank said was severe but plausible. That amount would be more than during the aftermath of the financial crisis more than a decade ago.

The ECB said the probability of that scenario is lower now, but “significant uncertainties remain in the short to medium term.”

Most banks were able to keep their capital levels stable through last year, although nine have taken advantage of looser regulatory requirements and ate into their buffers, the ECB said Thursday without naming the lenders.

The biggest concern for regulators is that low profitability—and a potential flood of losses from bad credit—could quickly deteriorate those capital levels.

Write to Patricia Kowsmann at [email protected]

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link

Continue Reading

Bad Credit

How long do offers last, and what if I have bad credit? We answer the most-asked mortgage questions

Published

on

Forget the eyes – nowadays, it is our internet searches that provide a window into the soul.  

We often turn to search engines to ask the questions that are on our minds, whether we’re just looking for a quick answer or because it’s something we are embarrassed to ask in person. 

Now, Britons’ most common mortgage questions have been revealed, thanks to a new analysis of Google searches.  

Many of the mainstream lenders are able to offer a mortgage within 2-3 weeks of an application being submitted, according to the mortgage experts we spoke to

Many of the mainstream lenders are able to offer a mortgage within 2-3 weeks of an application being submitted, according to the mortgage experts we spoke to

Comparethemarket.com looked at search data from the last twelve months, and discovered that the most asked mortgage question, with 20,960 searches, was ‘How long does a mortgage application take?’

Britons also wanted to know how long a mortgage offer lasted for, how to get a mortgage with bad credit, what an interest only mortgage was, and what a lifetime mortgage was. 

Applying for a mortgage can sometimes be complicated, and there is often a lot of jargon to contend with – so it is not surprising that people search online for more information.

This is Money asked Mark Harris of mortgage broker SPF Private Clients, Nicholas Morrey of mortgage broker John Charcol and a spokesperson from the Mortgage Advice Bureau to help provide answers to the five most-asked questions.

How long does a mortgage application take?

The most common mortgage question on Google, this is particularly relevant at the moment given that some buyers are keen to complete before the stamp duty holiday ends on 31 March. 

But the answer depends on the type of mortgage application being submitted, according to Harris.

For example, a product transfer – where you stay with your current lender but move to a new deal – can take a matter of days, whilst a more complex mortgage application can take weeks.

‘Once the application is submitted, a lot depends on the lender and the complexity of the application – it may take anywhere between one day to two weeks for an initial assessment to take place,’  Harris said. 

If you’re self-employed or the mortgage valuation requires a surveyor to visit the property in person, then you are likely to face further delays. 

A firm mortgage offer will follow once your application has been fully reviewed and an acceptable valuation received.

The experts we spoke to said that typically, it would to take two to three weeks from application to offer – but the pandemic has meant that these timescales have been stretched. 

‘Unfortunately, during the Covid-19 pandemic, lenders have suffered from staff and resource issues and tasks are taking longer to complete,’ said Harris.

‘Also, given the effect on employment and income, lenders are scrutinising applications in greater depth to see how applicants have been affected.’ 

How long does a mortgage offer last?

In most cases mortgage offers last for six months, although some offers will only last for three months.

‘If the offer expires, lenders will sometimes agree to an extension – although this will sometimes require a re-assessment by the lender,’ said Morrey.

A typical mortgage offer will last for six months, but this can sometimes be extended

A typical mortgage offer will last for six months, but this can sometimes be extended

‘For example, the original deal may no longer be available, or a new valuation may be required, or the lender may wish to re-assess your income and outgoings.’

Where an application involves a new-build property, the offer may last longer – potentially up to 12 months, according to Harris.

‘Borrowers should be aware that some new builds have completion deadlines that may not coincide with offer expiry dates,’ he said.

How to get a mortgage with bad credit?

Some lenders will not offer mortgages to people with a history of bad credit, and this was something that Google searchers wanted to know how to get around. 

Lenders that are willing to do so often charge a higher interest rate, to reflect the increased level of risk.

‘When getting a mortgage with bad credit, you can expect to borrow less and to pay more in interest in comparison to someone who has an exemplary credit record,’ explained the spokesperson for the Mortgage Advice Bureau.

Having bad credit may mean you are not able to borrow as much on your mortgage

Having bad credit may mean you are not able to borrow as much on your mortgage

‘High street lenders are generally averse to dealing with those who have bad credit, which can make it pretty difficult.

‘When you apply for a mortgage, it can register on your credit file – and if you apply to a number of lenders to see if they will lend to you, it may be doing additional damage to your credit score.’

‘Your best option, according to Mortgage Advice Bureau, is to contact an established and experienced mortgage broker.

‘They will have access to contacts and deals that are exclusive and not available to the general public. The mortgage broker will carry out a ‘soft’ credit check first, so your inquiry doesn’t negatively impact your credit score.’ 

What is an interest-only mortgage?

Another common question on Google concerned interest-only mortgages. So what are they? 

When borrowing for a home, you can either opt for a repayment mortgage or an interest-only mortgage.

With a repayment mortgage, you will pay back a part of the loan, as well as the interest, each month until you eventually pay off the mortgage.

With an interest-only mortgage, you will only pay the interest each month, with the loan amount remaining the same.

‘It means your monthly payments will be lower but, at the end of the mortgage term, the full amount you borrow is still outstanding and you have to pay the lender back everything at that time,’ said Morrey.

‘When applying for an interest-only loan, the borrower must demonstrate that there is a clear and credible strategy in place to repay the capital,’ added Harris.

What is a lifetime mortgage?

A lifetime mortgage is a mortgage secured on your home, with the loan only being repaid when you pass away, go into long-term care or sell the property.

Two examples of this are retirement interest-only mortgages and equity release mortgages.

Equity release allows you to access some of the equity in your home via a lifetime mortgage

Equity release allows you to access some of the equity in your home via a lifetime mortgage

‘Lifetime mortgages often have fixed rates of interest, and in the case of equity release mortgages, the fixed rate is for life and not just two or five years,’ explained Morrey.

He added: ‘They should not be confused with lifetime tracker mortgages, which track a specific index such as the Bank of England base rate – these will likely have an end date and won’t be for a ‘lifetime’ in itself.’

There are strict lending criteria, with the amount you can you borrow depending on your age.

‘Seeking expert financial and legal advice is crucial for this type of mortgage,’ said Harris.

‘An adviser covering both equity release and standard mortgages would be most useful as they can assess the most suitable route forward.’

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Source link

Continue Reading

Bad Credit

What is a Subprime Mortgage?

Published

on

What is a subprime mortgage? If you’re asking this question, chances are good you’re either trying to borrow for a home with poor credit or you’ve been offered a loan you’re concerned is a subprime loan. We’ll explain the answer to the question “what is a subprime mortgage?” and discuss some of the risks and alternatives.

What is a subprime mortgage?

Prime loans usually offer competitive interest rates to well-qualified borrowers. A subprime mortgage is similar to a conventional mortgage, except it has a higher interest rate. Subprime loans are geared toward borrowers with bad credit who can’t qualify for a prime mortgage at the best rates. Lenders take a bigger risk with subprime loans, so they charge substantially higher rates due to the borrower’s poor credit history.

If you have a credit score below 620, you may not be able to qualify for a prime mortgage, but you might get a subprime mortgage.

Types of subprime mortgages

There are multiple types of subprime mortgage loans. However, one particular type of loan — an adjustable-rate mortgage — is especially common for subprime mortgages.

Adjustable-rate mortgages

Many subprime mortgages are adjustable-rate mortgages, or ARMs. The introductory rate on an ARM is fixed for a limited time. For example, a 5/1 ARM provides a fixed rate for five years. After that, the rate adjusts based on a financial index.

That means your interest rate may go down — but it could go up, too. ARMs carry more risk than fixed rate loans. If interest rates rise, monthly payments could increase. If you take out an adjustable loan, find out how high your payment could go. Don’t assume you’ll always be able to refinance or sell your home before it adjusts.

Fixed-rate mortgages

With fixed-rate subprime mortgages, the interest rate remains the same for the entire repayment period. Since the rate doesn’t change, payments don’t change.

The important question is, what is a subprime mortgage interest rate you’d qualify for? You need to make sure the rate is reasonable and that monthly payments are affordable.

Shop and compare rates from multiple mortgage lenders for poor credit to find the best subprime loan rates. And use a mortgage calculator to see how much your monthly payment would be for any loan you’re considering.

Interest-only mortgages

Interest-only mortgages allow you to pay only interest for a limited time, such as the first five years. This makes monthly payments more affordable, but you don’t make progress in reducing your loan principal.

At the end of the initial period, you’ll begin paying both principal and interest. Your payments may rise substantially because you’ll have a shorter timeline to pay your loan off. If you took a 30-year mortgage and only paid interest for the first 10 years, you’d have just 20 years to pay off your entire principal balance.

Most interest-only loans are also structured as ARMs, so you take the added risk of rates going up and payments rising.

Dignity mortgages

Dignity mortgages are a specific type of subprime loan offered by some lenders. With this type of mortgage, you’ll initially have a high interest rate. But if you make on-time payments for a period of time, your interest rate will eventually be reduced to the prime rate.

Subprime mortgage risks

It’s important to also consider if you’re willing to take on the risk of this type of loan. Some of the biggest risks include:

  • Interest costs will be high: You will pay significantly more mortgage interest over time than if you took out a conventional mortgage.
  • Finding a lender may be difficult: Not all mortgage lenders offer loans to subprime borrowers. You could be limiting your potential loan options.
  • Payments could increase: If you choose an ARM, you face the risk of interest rates going up and payments rising.
  • Foreclosure is possible: If you don’t pay your subprime mortgage loan, your lender will foreclose. Your credit could be severely damaged.

Lenders are required under Dodd-Frank financial reform laws to conduct an “ability-to-repay” assessment. This ensures borrowers are capable of paying back their loans. These mandates can reduce the risk for borrowers. But the bottom line is buying a house with bad credit can create a host of complications.

Alternatives to subprime mortgages

You may be wondering if there are other options. The good news is that there are multiple solutions for borrowers with bad credit. Some of the best options include these government-back loans:

  • FHA loan: FHA lenders often work with borrowers with lower credit. FHA loans are available to borrowers with credit as low as 500 as long as they make a 10% down payment. Borrowers with scores of 580 or higher can get approved with a 3.5% down payment.
  • VA loan: A VA mortgage loan is available to eligible service members and veterans regardless of their poor credit history. The VA doesn’t set a minimum score, but some lenders do.

USDA loan: These allow you to purchase eligible homes in rural areas. More stringent underwriting is required to qualify borrowers with credit scores below 640. But it may still be possible to qualify.

Source link

Continue Reading

Trending