What they don’t have, in some cases, is documents showing that they have title to the property, which is slowing down process of foreclosure.
As I haven’t received any morgage payments from you, I’ll be foreclosing on your house. No I can’t prove that I have legal right to do so. But hey, what difference does that make?
You're missing the point. The banks can document the existence of a loan to the deadbeat home buyer who hasn't been making the mortgage payments. What they can't do, without a lot of additional work, is prove that they have clear title to the home. The so-called "fraud" is merely an attempt to speed up the process of foreclosure.