Finance
What is the 'secondary mortgage market'?
AA market for second mortgages and home equity loans
BThe market where lenders sell mortgage loans to investors, providing lenders with funds to make new loans✓ Correct
CA market in which borrowers with poor credit can obtain loans
DThe process of refinancing an existing mortgage
Explanation
The secondary mortgage market is where lenders sell existing mortgage loans to investors (such as Fannie Mae, Freddie Mac, and Ginnie Mae). This frees up capital for lenders to make new loans. The secondary market is the liquidity engine of the mortgage industry.
Related California Finance Questions
- What is the primary purpose of the Truth in Lending Act (TILA) as it applies to California residential mortgage loans?
- What is a 'reverse mortgage' and who is it designed for?
- Which document provides a borrower with a standardized breakdown of estimated closing costs within 3 business days of a loan application?
- A purchase-money mortgage is:
- A 'due-on-sale clause' in a mortgage means:
- What is a 'short sale'?
- What is seller financing (purchase money mortgage)?
- What does it mean when a buyer is 'pre-approved' for a mortgage?
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →