Two recent pieces of news will have an offsetting effect on movement in the housing market. Applying negative pressure will be the growing number of adjustable rate mortgage resets and recasts on the horizon.  

A reset refers to a change in the interest rate of a loan; while a recast refers to the process in which a loan is recalculated taking into account both the new interest rate and the remaining principal to fully amortize the loan over the remaining term.

In 2011, upwards of 1.74 million mortgages (worth up to $421 billion) are due to be reset or recast. Though not all of these mortgages will end up in delinquency, a significant number of these homeowners will find themselves unable to make the new, higher payments and end up in either short sales or foreclosures. According to Kevin Brekke of Casey Research, this wave of resets will continue through late 2012. "With house prices behaving like they intend to resume the trajectory of descent seen in 2008/2009, a bottom in housing prices does not look possible until at least 2013."

While the potential for new foreclosures will place downward pressure on the housing market, two recent court findings could have the opposite effect. In U.S. Bank v. Ibanez a court determined that a bank cannot foreclose on a homeowner unless the bank can produce clear title to the property. Recently, the Massachusetts Superior Court, ruling in the case of Bevilaqua v. Rodriguez, found that a homeowner cannot obtain clear title to an improperly foreclosed-upon property.