I think she over-simplifies the problem and, at least in the written version, totally omits one of the key components in the process which as added greatly to the problems. The reason the note and the trust deed aren’t in the file is that after original funding, ownership of the notes (and the security instrument) have been transferred, sometimes multiple times, unually ending up in a securitized trust. That trust, is (almost always) the legal holder in due course of the note and the security instrument. MERS, as a nominee holder of the security instrument, has, overall, done a fine job of keeping track of who owns what. But the responsibility of properly endorsing and forwarding the hard copies of the notes falls to the buyers and sellers of the notes (And not MERS as far as I can tell.) It has always been in the buyers interest to make sure the proper tracking of those documents took place. The responsibility should fall on the backs of the loan servicers (which is a whole different party), but they have failed miserably.
I think she fails to really explain the dating problem with the notes comes in. What appears to have happened is that the foreclosure process is started, based on signed statements that the party foreclosing has full knowledge of the documents. The servicer then tracks down the actual notes (and trust deeds) makes sure that all endorsements are up to date, and adding missing endorsements (apparently sometimes forged, sometimes legal endorsements) but if those endorsements are dated after the foreclosure process has begun, the foreclosure may be invalid, as the foreclosing party did not have standing at the time of the filing. Under normal circumstances, refiling after all endorsements are caught up to date should remedy the situation.
I think she’s wrong on the assertion that buyers may have problems down the line with lenders suddenly appearing claiming to have a claim on the property. They can’t spontaneously own the property. And they can’t initiate foreclosure proceedings on a loan and trust deed that has already been fully reconveyed. They may have a claim against someone else in the chain, but not a subsequent buyer.
