By Mike Colpitts
Editor
A clear and present danger is challenging the U.S. and it’s not the stuff that politicians in Washington, D.C. drudge up to drive fear emotionally charging the masses to sway public opinion. 
It’s the reality of our times — 7 million foreclosures that have already been formally repossessed by the banks, a national unemployment rate that averages 9% once again and another 8 million forecast foreclosures.
The good news in all of this is that there are fewer foreclosures now forecast by Housing Predictor than a little more than a year ago when we last updated the forecast for the housing market. The total forecast of residential properties to be foreclosed in the foreclosure crisis is now 15 million, down 1.5 million from a year ago.
The decrease is directly related to government programs that have had little success in the big picture of things with just over 600,000 homes with mortgages being modified through the Obama administration program. The additional downgrade is attributed to refinances by those who were able to adjust their mortgages.
The foreclosure crisis has topped that of any other in U.S. history. Coupled with unemployment that tops 20% in some regions of the country, the crisis threatens to undermine America for years to come, and is likely to economically damage the U.S. economy for years.
If history is the best teacher, then there is a lesson from the U.S. Savings and Loan Crisis to note here. Federal taxes were increased as a result of the S&L Crisis and at the time the Government Accountability Office estimated it cost every man, woman and child in the U.S. $10,000 to pay-off that debt.
The present financial crisis, centered in the housing market is at least eight to ten times the size of the S&L crisis. The logic behind this represents the enormity in terms of dollars that the foreclosure crisis poses as a clear and present danger.
By government estimates there are 6-million people who have been unemployed for more than six months alone. Millions of other workers remain sidelined, unable to pay their bills, pay taxes and fill the car with high-priced gasoline much less consider the purchase of a home. Other Americans are seriously contemplating walking away from their homes, and in the coming years with a problematic economy and falling home prices millions more will be forced from their homes.
As the editor of Housing Predictor, I have traveled from state to state during the years of the foreclosure crisis. I’ve been to Las Vegas to witness the toll of economic destruction that has been leveled at Sin City like a financial time bomb.
I’ve been to many parts of California, including the Central Valley and Inland Empire to witness first hand neighborhoods that are being destroyed by neglect. Tracts of new subdivisions suffer from the same catastrophe in Florida, which has the largest vacation home market in the country. Declining homes prices will endure for years to come in much of the Sunshine State as it combats the foreclosure crisis.
As I travel, the top question that I get from Americans is, “How long will this foreclosure nightmare last?” Industry insiders tell me that mortgage servicing companies are able to handle less than 1 million full foreclosures annually documenting the paperwork legally. That number may, however, improve as banks and mortgage servicing companies take on more employees to work the back-log down. That means the pace of foreclosures will sped-up and the numbers should theoretically rise.
That also means that short sales should increase. The volume of bank-assisted short sales has already shown some improvement, but they do little to actually help mortgage holders’ credit scores.
Former President Bill Clinton says that each foreclosure hurts the U.S. economy an average of $250,000. He ought to know. Clinton signed the bill that eliminated the Glass-Steagall Act that got the nation on this journey. As a result, the foreclosure crisis poses a clear and present danger to the U.S.