“The homeowner still owes the unpaid balance on the note but they owe it to the last person to whom the note was endorsed.”
So what is the last person to endorse the note was say Countrywide who no longer exsist who had previous to being brought by BOA had already sold the note in wrapped in a mortgage back security?
The investors who hold the RMBS force Countrywide (now BofA) to buy back the note. By doing this, the note and the mortgage are re-convered in the same party, and the lender who holds the title chain has a deficiency that allows them to foreclose. It seems very simple to me. Just force the banker who is last listed on the deed to buy back the mortgage.