It used to be that when a homeowner took out a mortgage, the bank held the paper.
If you had questions or needed help you simply contacted the bank.
The bank held the note and mortgage on-site and could produce this paper if they needed to payoff, foreclose or sell the loan.
When the loan was sold the note was endorsed and the mortgage assigned.
The new owner of the loan actually took possession of the note, mortgage and the assignment.
The assignment was property recorded in the county and the appropriate taxes and fees were paid for the transfer.
No other party was present and the homeowner was not confused as to who owned the loan.
Those were much simpler times.