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In the wake of the housing bubble there has been much in the press about the inability of lenders to prove
ownership of notes and security interests in foreclosure proceedings. Just when you thought that the news
couldn’t get any worse, more acts of total stupidity and arrogance are reported.


Property ownership was traditionally documented through a system of records at counties. Deeds evidencing
ownership, security interests of lenders (mortgages), assignments, and releases were recorded.

The timing of recording of security interests is very important because it determines the priority of claims. This
takes on real importance when borrowers are unable to repay the full amount of loans secured by the property.
The loans with junior security interests (like home equity loans) bear the greatest losses.

There are some 3,143 counties, parishes, and independent cities in the US. While lending was a local business,
dealing with county clerks was workable. Then came national lending, the Internet, and securitization…