Secondary Mortgage Market

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DEFINITION of 'Secondary Mortgage Market'

The market where mortgage loans and servicing rights are bought and sold between mortgage originators, mortgage aggregators (securitizers) and investors. The secondary mortgage market is extremely large and liquid.

INVESTOPEDIA EXPLAINS 'Secondary Mortgage Market'

A large percentage of newly originated mortgages are sold by their originators into the secondary market, where they are packaged into mortgage-backed securities and sold to investors such as pension funds, insurance companies and hedge funds. The secondary mortgage market helps to make credit equally available to all borrowers across geographical locations.

RELATED TERMS
  1. Collateralized Mortgage Obligation ...

    A type of mortgage-backed security in which principal repayments ...
  2. Secondary Mortgage Market Enhancement ...

    An act passed in the United States in 1984 to meet growing demand ...
  3. National Housing Act

    Federal legislation passed in 1934 to create the Federal Housing ...
  4. Fannie Mae - Federal National Mortgage ...

    A government-sponsored enterprise (GSE) that was created in 1938 ...
  5. Mortgage-Backed Security (MBS)

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  6. Freddie Mac - Federal Home Loan ...

    A stockholder-owned, government-sponsored enterprise (GSE) chartered ...
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