There is a very simple and straightforward explanation to the facts you relate which involves no mischief and nothing out of the ordinary whatsoever. The facts are not suggestive of any fraud, illegality or even of irregularity.
It has been common in mortgage banking for larger mortgage banking enterprises to originate production through both "retail" and "wholesale" channels. The "retail" lending involves the mortgage banking entity taking applications through its own employees, with the loans processed and underwritten in house. By contrast, the wholesale operation, also referred to as "correspondent lending" involves making loans through smaller mortgage banking entities.
The smaller mortgage banking entities might be small banks, savings and loans or credit unions without sufficient mortgage banking volumes to justify full scale mortgage banking operations. These also include smaller mortgage banking concerns lacking the resources to engage in a broader range of mortgage banking operations.
Larger mortgage lenders do not typically lend their own money. Instead, the loans are actually funded using funds advanced by a so-called warehousing lender. Mr. Roper has explained this in previous posts and what I have since read in mortgage industry publications and books about mortgage banking fully supports his explanation.
When a larger lender makes a loan, the lender draws against a credit line with the warehousing lender and the funds from this credit line are sent to the title company or other closing agent and placed in an escrow account to fund the loan at closing.
Terms of the warehousing credit line typically require the promissory note, indorsed in blank, to be sent to the warehousing lender within 72 hours (3 business days) of closing. The warehousing lender is not buying the loan. Instead, the note is simply being pledged as additional security for the repayment of the warehousing loan. This loan is actually repaid by the mortgage banker when the loan is sold to a GSE or sold into securitization. This uniformly happens within sixty days of closing.
As part of their wholesale -- correspondent lending -- operations, larger lenders evaluate loans for prospective purchase from smaller correspondent lenders and enter into a written commitment to purchase loans. Often, a part of the purchase commitment involves extension of a so-called "captive warehousing line of credit" to the smaller correspondent lender.
The line is "captive" in the sense that unlike a general warehousing line that the larger mortgage banker can use to fund pretty much any residential mortgage loan for ultimate sale to any secondary mortgage market investor, the captive warehousing line is available solely to fund the specific agreed upon loan which the larger mortgage banker has committed to purchase.
Given the size and scale of Countrywide, it had its own affiliated bank, which acted as the mortgage banking concern's primary warehousing lender. That is CHL, Inc. would make the loan, but it would draw against a warehousing account with Countrywide Bank to fund the loan. Even though affiliated, CHL, Inc. would still indorse and deliver the notes to Countrywide Bank. Countrywide bank was NOT buying the loan. Rather, Countrywide was simply loaning its corporate affiliate the funds to make the loan and taking the note as collateral. Thus the first negotiation of the note -- by indorsement and delivery -- to Countrywide Bank. Upon sale, the note would be renegotiated to CHL, Inc., which would sell the loan to an institutional mortgage investor, either a GSE or a RMBS trust. These sales involved indorsement in blank and physical delivery to the institutional custodian holding the actual notes for the investor.
In respect of the role of Bank of New York, another different kind of corresponding relationship comes into play. This is something better known to and understood by those who are older and who remember banking before the national consolidation and integration into a much smaller number of dominant national players.
Think of a small bank in a small town. That small bank may be the dominant bank in its own market. It might even be the only bank in town. If one customer in town writes a check on that bank and presents the check to another person or entity also banking at that same small bank, the check clears internally. The check need never leave the bank. Money is taken from one account and put into another account.
For many local transactions, check can clear without leaving the bank. But for checks sent entities out of town, those checks are going to be presented to the recipients bank and are going to clear through the recipient's bank to be ultimately presented for payment to the small town bank.
But it is inherently inefficient for such a small bank to have relationships with every other bank in the U.S. In fact, it is inefficient for such a bank to even have direct check clearing arrangements with more than a handful of other banks. For this reason, a very small bank will often have so-called corresponding relationships with one to three much larger banks in commercial centers in the bank's home state and possibly an additional corresponding relationship with perhaps one money center bank.
When checks are drawn against the small bank, based upon these pre-existing corresponding relationships, the checks actually clear and are paid through the corresponding banking. This is far more efficient because like commercial airline hubs check clearing can be concentrated through a smaller number of banks acting as financial hubs. Instead of exchanging checks and credits with each and every other small bank, each small bank clears only through much larger banks and the larger banks settle the checks amongst these smaller banks.
Now, back to Countrywide Bank, realize that Countrywide Bank, though quite large in terms of assets was never really a full service commercial bank with a large retail presence. Instead, it was a large boutique bank that gave Countrywide some of the deposit gathering privileges of a banking charter and allowed Countrywide to gather large FDIC insured deposits from institutional customers to fund Countrywide's operations. But Countrywide never had any vast check clearing operations, so it relied on other banks, like BNY to handle its check clearing and wire funding operations.
Because Countrywide is large and sinister, it is harder to imagine it using the simple expedient of another larger commercial bank for these routine check/wire clearing operations, but this was really far more economic than setting up its own check/wire clearing operation given the very limited presence of Countrywide Bank in this aspect of commercial banking.
The bottom line is that while Countrywide was clearly a large criminal enterprise, the transactions you describe are not sinister or questionable at all. This is an unproductive avenue for your defense in a case involving Countrywide/BAC.
Also, bear in mind that most foreclosure mills and most courts do not understand the information I have related above. It is important that you understand the underlying reality of these transactions so that you do not go too far down one of the wingnut paths advocated by scam artists like Mike H. If you drift off into this "vapor money" nonsense, you WILL LOSE. If, by contrast, you hold the plaintiff to its ordinary burdens of proof, as Mr. Roper has suggested in several insightful posts, you may still be able to use some of the unusual facts to create fact issues to preclude summary judgment.
Most witnesses produced by the banks can never describe these transactions with the simplicity or clarity I have set forth above. If you can get to trial and the banks send some robo-signing flunky, you may still be able to confuse and befuddle the witness sufficiently to prevail. Just avoid drifting off into wingnut never-never land!