There is legal and practical ownership and they differ in practice. So imagine Bank of America issues a mortgage. They don’t want to keep the risk on their bal

There is legal and practical ownership and they differ in practice. So imagine Bank of America issues a mortgage. They don’t want to keep the risk on their balance sheet so they create a mortgage backed security with 1000 other mortgages. Then they sell that to Goldman Sachs who in turn sells it to Lehman, but not the full portfolio only a portio, say tiers 8-10 of 10. In order to “facilitate liquidity” and “market efficiency” they wouldn’t document every transaction on the local county register of deeds. They would “trade” the securities by sending each other spreadsheets and hopefully “record” the transaction with a 3rd party like MERS. But when 2008 hit it often required going to court to fight out who owned what. Worse lots of homeowners ended up being foreclosed on because their payments didn’t go to the right owner on file. So yes, the legal title is recognized by a written record held by the government, the market implementation adds layers on top to facilitate trading the paper.