What is the primary function of the secondary mortgage market?
Correct Answer
B) Buy mortgages from primary lenders
The secondary mortgage market purchases loans from primary lenders, replenishing their capital so they can continue originating new loans. Entities such as Fannie Mae and Freddie Mac are major participants in the secondary market.
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Related Topics & Key Terms
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Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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