What would be the legal issue if a bank had you sign a "bunch of
papers" and your mortgage document was in the bunch of papers? By
signing the mortgage unknowingly over to the bank have you entered into
a legal contract? If so would the courts say that you were bound by
that contract even though there was no consideration?

You should only sign a contract if you have read the entire thing.

If you have signed the contract, it is legally binding in court. You
could try to argue that you had been tricked into signing the
contract, in which case you would have the option of declaring the
contract void.

http://law.freeadvice.com/general_practice/contract_law/offer_contract.htm

Whenever I read over a document I am about to sign, I frequently hear,
"You're the first person to actually read this."

It doesn't matter what you are signing; you must read before putting
your signature on a document. Anyone who hands you a sheaf of papers
and urges you to rip through them and throw your signature is probably
a crook. This applies to banks, video rentals, hospitals, car dealers
(omigod!), and contractors.

I'm a bit confused by the expression "signing the mortgage over to the
bank." How exactly do you mean?