Finance
What is the primary purpose of the secondary mortgage market (Fannie Mae, Freddie Mac, Ginnie Mae)?
ATo provide mortgage insurance to lenders
BTo regulate mortgage interest rates nationwide
CTo provide liquidity by purchasing mortgages from lenders, freeing capital for new loans✓ Correct
DTo offer direct mortgages to first-time Minnesota homebuyers
Explanation
The secondary mortgage market provides liquidity to primary market lenders by purchasing mortgages from originating lenders. This replenishes the lenders' capital, allowing them to make more loans. Without the secondary market, Minnesota lenders would have limited capital for new mortgages. Fannie Mae, Freddie Mac, and Ginnie Mae are the major secondary market entities.
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