Isn't the loan application processed first, getting pre-approved by the Fed to issue the credit? And when the note is executed, isn't it the US that ends up being obligated, in case of default?

So isn't what really happens that bookkeeping entries are made, and the credit is deposited into an account in the bank, to be disbursed at closing?

So while the note maker actually issues his note, and is the source of the credit, the credit is secured by the deed and backed by the full faith and credit of the US?

It would be great to really get this figured out.