I do not believe the paperwork was never done. I figure it got bundled up and shipped off to the highest bidder and will show up eventually.
Or purposefully destroyed to cover up for nonconforming, or poor underwriting standards that wouldn't have allowed the mortgage to be bundled into a security, allowing the investor(s) to put the mortgage back onto the lender. I believe this entire thing goes deeper than many folks realize. So many of these mortgages couldn't have met standards to get bundled for investors. In their covering their tracks, the banks broke the chain of paperwork to prove who owns it.