secondary mortgage market

The secondary mortgage market is where banks and lenders sell mortgage loans they’ve issued to other financial institutions or investors after they originate them. This process helps lenders free up funds, so they can issue more loans to homebuyers. When loans are sold, they are often bundled together into securities and sold to investors, providing liquidity and risk distribution. This market helps stabilize mortgage lending, making it easier and more affordable for people to buy homes. Essentially, it’s a vital financial system that ensures mortgage funds keep circulating smoothly in the economy.