Secondary Mortgage Market
Market where mortgage loans can be sold to investors. The availability of funds for financing real estate is affected by economic conditions, both local and national. The result is that at certain times or in certain geographic location little or no capital is available for mortgages' consequently, few if any loans are made. From the viewpoint of the lender, another problem is that real estate loans can be highly illiquid; thus, the supplier of funds can have a difficult time converting loans into cash. For these reasons, the need exists for same means by which a lender can sell a loan prior to its maturity date. The secondary mortgage market attempts to meet these needs. Capital can be made available during times of tight money and at capital-deficit locations. By selling mortgages in the secondary mortgage market, a lender can convert existing mortgages into cash which in turn be used to fund new mortgages. Likewise, an investor in the secondary market can buy existing mortgages, pay the seller a small servicing fee, and avoid the time and expense of originating and servicing the loans.
Popular Real Estate Terms
What Is a Real Estate Bubble? One definition for a real estate bubble is the fast increase in prices, usually driven by investors and speculators in major urban areas. Properties are ...
Sponsor sells interest to real estate investors in one property only. The total amount received from the equity investors is used by the sponsor to buy the property for the partnership. ...
A capitalized expenditure usually extending the useful life of a building or improving it in some manner over and above the original condition. In contrast, a maintenance or repair expense ...
Party that receives part or all of a construction job to do from the general contractor. ...
Document that must accompany a new issue of securities for a real estate company or partnership. It includes the same information in the registration statement, such as a list of directors ...
Action that is beyond that allowed legally. Examples are charging illegally high interest rate on mortgages and real estate exceeding the amount permissible by legal statute, and a real ...
Home inspector is the name the real estate industry calls the professional responsible for the close and thorough examination of a property. The home inspector usually is called upon ...
Individual with legal privileges and obligations. The legal term is sometimes used for a corporation. ...
Single mortgage or other encumbrance that covers more than one piece of real estate. ...
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