RC_SM_100.1 Fundamentals of Secondary Marketing

The primary mortgage market is where mortgages are originated. Borrowers who wish to get a loan go to mortgage lenders who then provide the money to fund those loans.

Lenders faced a challenge with 30-year mortgages: their capital was tied up for decades, limiting how much and how often they could lend. At the same time, investors were looking for higher-yield opportunities. The secondary market emerged to meet both needs—providing liquidity to lenders while offering attractive assets to investors. It allows lenders, GSEs, and investors to buy, sell, and trade existing mortgage loans.

The secondary market plays a crucial role in the national economy. For homebuyers, it helps ensure the availability of mortgage funds and supports a broad range of financing options. For lenders, it offers a way to boost profitability, manage risk, and still maintain relationships with borrowers.

Fundamentals of Secondary Marketing covers the history of secondary marketing in the US, key roles in the economy, and major participants such as private mortgage insurance companies, investors, and government agencies like Ginnie Mae, Fannie Mae, and Freddie Mac. It details the roles of warehousing, shipping, delivery, and responsibilities of secondary marketing departments, including loan sales, risk management, pricing, and hedging. This comprehensive overview helps learners understand the evolution, market players, and operational functions of secondary marketing in mortgage banking.

This is a single-family/residential course.

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