FinanceIntermediateDelaware Exam
What is the primary function of the secondary mortgage market in real estate?
ATo originate new mortgage loans to borrowers
BTo provide liquidity by buying and selling existing mortgage loansCorrect
CTo regulate interest rates on mortgage loans
DTo insure mortgage loans against default
Why To provide liquidity by buying and selling existing mortgage loans Is Correct
Answer B: To provide liquidity by buying and selling existing mortgage loans
The secondary mortgage market (Fannie Mae, Freddie Mac, Ginnie Mae) provides liquidity to lenders by purchasing mortgage loans, allowing lenders to make new loans with the proceeds.
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
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