Finance
The secondary mortgage market primarily functions to:
AOriginate new mortgage loans directly to consumers
BBuy mortgage loans from lenders, allowing lenders to replenish their funds and make new loans✓ Correct
CSet interest rates for all mortgage loans
DGuarantee mortgages against borrower default
Explanation
The secondary mortgage market (Fannie Mae, Freddie Mac, Ginnie Mae) purchases mortgage loans from originating lenders. This provides lenders with liquidity — fresh capital to make new loans — and helps stabilize mortgage interest rates.
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