What is the Secondary Market?

Primary Market

- Is where products are sold to the public for a real estate lender this refers to
loan origination. Once a loan is originated on the primary market it may be
sold on the secondary market.

Secondary Market

- Is where lenders and investors buy and sell existing mortgages or mortgaged-
backed securities, this frees up money for additional mortgage lending.
Basically, secondary market is the resale marketplace of loans.

1938 – Fannie Mae

- The creation of the Federal Mortgage Association.

- Its purpose is to buy the FHA and insured mortgages from the lenders, in
which this created the secondary marketplace where loans could be resold to
investors which provided lenders with fresh money to lend out to new
borrowers.