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
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Act of postponing a closing for another day or place. Adjournments of closing can occur for a variety of reasons including the lack of an appropriate closing statement, one or more parties ...
Situation in which a purchaser acquires mortgaged property and continues to pay the mortgagee for the debt outstanding. Although the new buyer continues to pay the mortgagee for the debt ...
Opinion of a judge having no direct legal or binding effect on the outcome of a pending judicial decision. An obiter dictum is considered to be an incidental judicial remark about some ...
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