It isn't a major problem because property recording is pretty strong, and I think it should stay that way.
I don't believe that people should ever get a free house because of a paperwork error, but I also believe the paperwork should be correct. The most likely outcome IMHO will be that for these MBS securities that have a pool of mortages, due diligence will be required to convince the courts just who it is that the money is owed to, and it will both cost time ( a couple of years) and money (a couple of percent) to perform that due diligence.
That will further drive down the value of the mortgage backed securities, since most of them are under water. In the meantime, the home won't get much maintenance, further impairing its value. It's a real mess.
Sounds like they have a cause of action but I’m not for rewarding the hundred’s of thousands of deadbeats for a mistake or two.