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Q: How can I tell truth from fiction about home foreclosures?

A: Freddie Mac, a government-sponsored buyer of existing home mortgages, recently launched a new program to help consumers separate foreclosure fact from fiction. It’s a new video series on its YouTube Channel (www.youtube.com/FreddieMac). Each 90- to 120-second video dispels one of five common myths that could prevent people from keeping their homes if they face foreclosure.

Here are a couple of the myths they are correcting:

Myth 1: If my house is foreclosed, I can never buy a house again — the foreclosure will stay on my record forever.

Truth 1: Foreclosure can have a devastating effect on your finances and you personally, but you can recover. Use the time after foreclosure to prepare yourself for successful homeownership the second time around by creating a spending and savings plan and rebuilding your credit.

Myth 2: I should stop paying my mortgage so I can get assistance with my mortgage payments.

Truth 2: Stopping payment on your mortgage only hurts your situation and can expose you to foreclosure and credit difficulties that could require years to rebuild.

Q: What is the “shadow inventory” of homes?

A: Shadow inventory is usually described as the number of homes in bank inventory waiting to be sold, plus the homes that have been foreclosed — but for a variety of reasons. These are homes where the mortgages are delinquent and are likely to eventually be foreclosed. The shadow inventory is considered to be a marker for how long it will take for a depressed housing market to return to normal.

About the writer
Jim Woodard is a national real estate columnist who writes for Creators Syndicate, creators.com.