Secondary Mortgage Market:
The Secondary Mortgage Market is where mortgages are purchased by
investors from the Mortgage Bankers, Savings and Loans and other
institutions that make mortgage loans.
The mortgages are typically bundled together in a mortgage pool or fund.
Investors invest money in the mortgage pool. In that way, investors acquire
an ownership interest in the mortgages.
As the mortgage loans are sold into the Secondary Mortgage Market, the
original mortgage lenders receive a return of their funds. Then they can use
those funds to make new mortgage loans to other home buyers.
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