Question
What is the difference between primary and secondary market?
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9th Dec 2009 by JonB
The primary mortgage market is the market in which lenders and customers interact directly. The lender offers terms, the customer attempts to get the best deal possible, and ideally in the end a loan is funded. This is the side of the mortgage market that we see and are familiar with it.
The secondary mortgage market is where individual loans are packaged together according to parameters like size, risk profile and duration and sold as mortgage backed securities liked Collateralized Mortgage obligations (CMOs) and Collateralized Debt Obligations (CDOs).
The primary mortgage market is the market in which lenders and customers interact directly. The lender offers terms, the customer attempts to get the best deal possible, and ideally in the end a loan is funded. This is the side of the mortgage market that we see and are familiar with it.
The secondary mortgage market is where individual loans are packaged together according to parameters like size, risk profile and duration and sold as mortgage backed securities liked Collateralized Mortgage obligations (CMOs) and Collateralized Debt Obligations (CDOs).
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4th Dec 2009 In Investing
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Subjects: primary market,
secondary market,