The secondary mortgage market refers to the buying and selling of existing mortgage loans. In the secondary market, mortgage loans are bought and sold by investors, such as banks, mortgage companies, and government-sponsored entities (GSEs), such as Fannie Mae and Freddie Mac. The purpose of the secondary mortgage market is to provide liquidity to the primary market, allowing lenders to originate new loans and borrowers to access new financing.
In summary, the primary mortgage market is where mortgage loans are originated and sold directly to borrowers, while the secondary mortgage market is where existing mortgage loans are bought and sold by investors. The primary market is where mortgage loans are first created, while the secondary market provides liquidity to the primary market by allowing for the buying and selling of existing mortgage loans.
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