Finance
The secondary mortgage market primarily provides liquidity by:
AA. Making loans directly to homebuyers
BB. Purchasing loans from originators, allowing lenders to free up capital to make new loans✓ Correct
CC. Regulating interest rates for primary lenders
DD. Insuring mortgages against borrower default
Explanation
The secondary market (Fannie Mae, Freddie Mac, Ginnie Mae) buys mortgages from originators, bundling them into mortgage-backed securities. This replenishes lender capital so they can originate new loans, providing liquidity to the housing market.
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