Finance
The secondary mortgage market primarily:
AProvides direct loans to homebuyers
BBuys and sells existing mortgage loans, providing liquidity to primary lenders✓ Correct
CInsures FHA and VA loans
DSets maximum interest rates for lenders
Explanation
The secondary mortgage market (dominated by Fannie Mae and Freddie Mac) buys mortgage loans from primary lenders (banks, mortgage companies), packages them as mortgage-backed securities, and sells them to investors. This provides lenders with capital to make new loans.
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