Yes, but there are not very many banks who have done that, and damned few who were innocent victims. One other problem here is that the banks entered many of these contracts fraudulently. Under Glass-Steagall, banks were not incentivized to make good loans, but made money whether or not the loans were going to be paid back, so they made loans. Lots of them. They loaned to people that they knew didn’t have a prayer of paying it back, using appraisers who were paid to over appraise property, then sold them to bundlers before the first payment was due, so they could use the money to make another loan to someone who couldn’t pay.

The bundlers converted the loans into securities and rated as AAA by corrupt ratings companies, and sold this risky paper to unsuspecting victims (like my company’s 401K) who are now left holding the bag while the bankers collect millions in bonuses that are being funded by my tax dollars.

The banks are NOT innocent victims here.

To answer your questions about the banks right to seize a property without proof, the answer is unequivically no. But, for the same reason, a person does not have the right to hold property that is not theirs (just because they signed an IOU does not mean that something is theirs). I agree with all of your requirements for a legal action to seize, but my question was more the belief that someone is entitled to hold a property (not the reverse). I belive the banks behaved poorly, but if you look at the contracts, people willingly signed mortgages that state that the bank can sell off the note — it is a procedural matter after that to prove who bought it and who then has the right to seize. I would argue that the note signer has just as little right to hold as the banks to seize. My follow-up question is this: do you believe that if the original bank had the note in hand, they could seize the property? Assume they went through the federal process.