Keith - This is not meant to be an insult, but I think you are hung up on the "Banks are bad" mantra that we hear so often and are losing sight of the practical effects of what you saw.
Remember, as J Scott said, the banks are the rightful lienholder. While they may not have the legal documentation to prove it, the homeowner bought the house using a bank note, and he knows it. The note was sold a couple of times until it ender up in Wells/whoever's hands. No one else has claim to it.
The scenario which you propose would require some bad actor to know that a particular note "fell behind a filing cabinet", which in and of itself is pretty unlikely. It also requires the title company of the illegal transaction to ignore the outstanding lien in place with the County, which if they do that, they should go out of business.
If you are saying that someone randomly filing out a quit claim deed and trying to sell a property is a possible danger you are right, but that has always been a problem and is independant of banks forging documents.
While forging documents is not a good thing, who is the victim?
