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I don’t think you are talking about the County Clerk of Court. It is the County Recorder who has charge of recording legal documents for public information. At least where I am from, the Court clerk files lawsuit and other litigation papers while the County Recorder files deeds and other documents affecting legal title.

Whether a mortgage document ought to be recorded everytime it changes hands in the finance world is something I haven’t considered. Mortgaged property is recorded in the name of the buyer and not the lender. To the extent the lender is involved in recording, it is at the initial financing and is paid in that transaction.

If a buyer defaults on the debt, there is usually, within the pile of documents executed, a deed from the buyer back to the lender to be recorded at the time the lender legally takes back the property. If that happens, the lender either records the deed itself or assigned the deed to whomever now has legal right to enforce the obligation and take back the property.

I don’t see where the counties and states are losing out on money by failing to record an inchoate deed. The purpose of recording documents is to notify the public that certain individuals have a legal interest in the property and it is up to the parties themselves to decide whether they need to record the deed, and when. There is no legal requirement to record any deed, so far as I know. It is a device to protect the interest of the recording party but it isn’t required until you want to enforce it in court.

1) Clerk or Recorder depends on the State - same thing different name.

2) All liens must be properly registered against the property in which they encumber (called actual notice or notice to the world that there is a lien against real property - this dates back to 17th century property laws)

3) Modern day securities prove too complex for Main Street Recording Laws (failing to record lien holding interest)

A discharge from anyone but the real creditor means nothing.

A Straw Man’s interest won’t do (Rule 10b-5)

http://www.foreclosurehamlet.org/profiles/blogs/toxic-discharge-tutorial

Even if the mortgage was never recorded it does not mean that the mortgagee has does not have a valid security interest against the original mortgagor.

The entire purpose of the recording statute is to give notice to subsequent lenders and purchasers. Recording the lien does not validate it, it only perfects it against other third parties. So, if a lender fails to record its mortgage and a subsequent lender then lends money against the same property and records it mortgage, the second lender holds the superior position because the first lender failed to give notice of its lien.

The original borrower, however, was always fully aware of the mortgage. Actual notice always supersedes the recorded notice.