FinanceQuestion 76 of 100
A key purpose of the secondary mortgage market, including entities like Fannie Mae and Freddie Mac, is to:
a.Originate loans directly to consumers at branches
b.Provide liquidity by buying loans from primary lenders
c.Set property tax rates
d.License real estate brokers
Explanation
The secondary mortgage market buys existing loans from primary lenders, giving those lenders fresh funds to make more loans and thus increasing liquidity. Fannie Mae and Freddie Mac are major participants. The primary market is where borrowers get their original loans.
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