In the midst of the high flying housing bubble, mortgage companies sold at such a volume that many didn't or couldn't keep up with all the paperwork. What that means for the nation's housing market now is that there are many houses that should be foreclosed but can't because no one can prove that there's a mortgage. Or worse, companies are trying to foreclose on houses on which there is no mortgage.
What this means long term is that the bottom of the housing market still may be ahead. If banks can't foreclose and move their inventory then housing prices will stay low as these houses trickle onto the market over the next many years. Read more about it here in Paul Krugman's column from the New York Times.
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