This issue has been coming up in the news now and then for a few years now, and it tends to get way overblown.
First of all, you tend to see it more in states like Florida which are judicial foreclosure states where a debtor tries to raise any defense they can think of in response to a lawsuit for foreclosure. In non-judicial foreclosure states like California, you would need to file suit, post a bond, and affirmatively try to stop a trustee from foreclosing, unless you use bankruptcy to try to stop the foreclosure.
In bankruptcy, the issue does come up, and if you are an incompetent servicer, the issue can slow down your attempts to get relief from the bankruptcy stay in order to proceed with foreclosure. But if you can show that you are the real party in interest and have a legitimate reason why the original note is lost or not available, it is not usually going to be an issue.
