Quite possible.
If that happens, though, and the lien is properly cleared, then you should be able to request a deed from your county (or whatever jurisdiction handles that).
I suspect there will be a sudden investment in paperwork tracking by banks and servicers, so that this shouldnt happen. In general, the people who work at servicers arent paid very well and their equipment is 3rd rate. I used to work at an I Bank whose servicer was based in Arlington, TX and they only bought 2nd hand servers!
And if more than one entity lays claim? What if they come saying hey we were never paid bcause the service agent didn’t know who to send the money to or if they did they didn’t note what mortgage it went against? I am not saying it can’t be cleaned-up but it could end-up costing you thousands of dollars and hours and hours of your time. Some are saying that there maybe no way to clean the deed up depending on how mired they become in various law suits which are bond to arise.
http://www.freerepublic.com/focus/f-bloggers/2607008/posts